[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
 HEARING TO REVIEW MARKET PROMOTION PROGRAMS AND THEIR EFFECTIVENESS ON
            EXPANDING EXPORTS OF U.S. AGRICULTURAL PRODUCTS

=======================================================================



                                HEARING

                               BEFORE THE

    SUBCOMMITTEE ON RURAL DEVELOPMENT, RESEARCH, BIOTECHNOLOGY, AND
                          FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 7, 2011

                               __________

                            Serial No. 112-9


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois         TIM HOLDEN, Pennsylvania
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas            JOE BACA, California
JEFF FORTENBERRY, Nebraska           DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio                   DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania         HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida            JIM COSTA, California
MARLIN A. STUTZMAN, Indiana          TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia                LARRY KISSELL, North Carolina
STEPHEN LEE FINCHER, Tennessee       WILLIAM L. OWENS, New York
SCOTT R. TIPTON, Colorado            CHELLIE PINGREE, Maine
STEVE SOUTHERLAND II, Florida        JOE COURTNEY, Connecticut
ERIC A. ``RICK'' CRAWFORD, Arkansas  PETER WELCH, Vermont
MARTHA ROBY, Alabama                 MARCIA L. FUDGE, Ohio
TIM HUELSKAMP, Kansas                GREGORIO KILILI CAMACHO SABLAN, 
SCOTT DesJARLAIS, Tennessee          Northern Mariana Islands
RENEE L. ELLMERS, North Carolina     TERRI A. SEWELL, Alabama
CHRISTOPHER P. GIBSON, New York      JAMES P. McGOVERN, Massachusetts
RANDY HULTGREN, Illinois
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin

                                 ______

                           Professional Staff

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                 ______

Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
                              Agriculture

                 TIMOTHY V. JOHNSON, Illinois, Chairman

GLENN THOMPSON, Pennsylvania         JIM COSTA, California, Ranking 
MARLIN A. STUTZMAN, Indiana          Minority Member
AUSTIN SCOTT, Georgia                HENRY CUELLAR, Texas
RANDY HULTGREN, Illinois             PETER WELCH, Vermont
VICKY HARTZLER, Missouri             TERRI A. SEWELL, Alabama
ROBERT T. SCHILLING, Illinois        LARRY KISSELL, North Carolina

                Mike Dunlap, Subcommittee Staff Director

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................     2
Johnson, Hon. Timothy V., a Representative in Congress from 
  Illinois, opening statement....................................     1
    Prepared statement...........................................     1

                               Witnesses

Brewer, John, Administrator, Foreign Agricultural Service, U.S. 
  Department of Agriculture, Washington, D.C.....................     3
    Prepared statement...........................................     5
    Submitted questions..........................................    98
Wootton, Michael J., Senior Vice President Corporate Relations, 
  Sunkist Growers; Chairman, Coalition to Promote U.S. 
  Agricultural Exports, Sherman Oaks, CA; on behalf of National 
  Council of Farmer Cooperatives.................................    38
    Prepared statement...........................................    39
Censky, Stephen L., Chief Executive Officer, American Soybean 
  Association, St. Louis, MO.....................................    43
    Prepared statement...........................................    44
Lively, R. Thad, Senior Vice President, Trade Access, U.S. Meat 
  Export Federation, Denver, CO..................................    48
    Prepared statement...........................................    49
Hamilton, Tim, Executive Director, Food Export Association of the 
  Midwest USA and Food Export USA--Northeast, Chicago, IL........    51
    Prepared statement...........................................    53
Nikolich, George, Vice President, Technical Operations, Gerawan 
  Farming, Inc.; Board Member, California Grape & Tree Fruit 
  League, Reedley, CA............................................    56
    Prepared statement...........................................    57

                           Submitted Material

Bedwell, Berry, President, California Grape and Tree Fruit 
  League, submitted letter.......................................    69
Brauner, Susan, Director of Public Affairs, Blue Diamond Growers; 
  Executive Member, Coalition to Promote U.S. Agricultural 
  Exports; Member, National Council of Farmer Cooperatives, 
  submitted statement............................................    70
Cotton, Guy P., Grower Direct Marketing, submitted letter........    71
Darneille, Wallace L., President and Chief Executive Officer, 
  Plains Cotton Cooperative Association, submitted statement.....    72
Dorr, Thomas C., President and Chief Executive Officer, U.S. 
  Grains Council, submitted statement and charts.................    73
Engelhard, Dennis, President, United States Dry Bean Council, 
  submitted letter...............................................    79
Keck, Ken O., Executive Director, Florida Department of Citrus, 
  submitted statement and charts.................................    80
Wilson, Chiles, President, Rivermaid Trading Company, submitted 
  letter.........................................................    87
American Seed Trade Association, submitted statement.............    87
U.S. Apple Association, submitted statement......................    91
U.S. Wheat Associates; National Association of Wheat Growers, 
  submitted statement and fact sheet.............................    93
USA Rice Federation, submitted statement.........................    96



 HEARING TO REVIEW MARKET PROMOTION PROGRAMS AND THEIR EFFECTIVENESS ON


           EXPANDING EXPORTS OF U.S. AGRICULTURAL PRODUCTS

                              ----------                              


                        THURSDAY, APRIL 7, 2011

                  House of Representatives,
      Subcommittee on Rural Development, Research, 
            Biotechnology, and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 9:30 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Timothy 
V. Johnson [Chairman of the Subcommittee] presiding.
    Members present: Representatives Johnson, Thompson, 
Stutzman, Scott, Hartzler, Hultgren, Schilling, Costa, Cuellar, 
Welch, Sewell, and Kissell.
    Staff present: Mike Dunlap, Tamara Hinton, John Konya, John 
Porter, Debbie Smith, Andy Baker, Scott Kuschmider, and Jamie 
Mitchell.

OPENING STATEMENT OF HON. TIMOTHY V. JOHNSON, A REPRESENTATIVE 
                   IN CONGRESS FROM ILLINOIS

    The Chairman. I will now call this hearing of the 
Subcommittee on Rural Development, Research, Biotechnology, and 
Foreign Agriculture to review market promotion programs and 
their effectiveness on expanding the exports of U.S. 
agricultural products, to order.
    I am Congressman Johnson, and this is our Ranking Member, 
Mr. Costa, of California. I have already asked that my opening 
statement be inserted in the record.
    [The prepared statement of Mr. Johnson appears at the 
conclusion of the hearing:]

  Prepared Statement of Hon. Timothy V. Johnson, a Representative in 
                         Congress from Illinois
    Good morning. I would like to start by thanking Administrator 
Brewer for being here today, and each of our witnesses on our second 
panel for making time in their schedules and traveling across the 
country to be here this morning.
    The prosperity of rural America is closely tied to the prosperity 
of our farmers and ranchers. At a time when the country is struggling 
to recover from a dramatic economic downturn, U.S. agricultural exports 
have been expanded through the hard work of our producers, exporters, 
and those who work to create new opportunities in foreign markets.
    As the global population continues to expand, greater demand for 
food will follow. I know that our farmers and ranchers are up to the 
task and will continue to be the most efficient producers of food, 
fiber, and fuel in the world. However the global marketplace is not 
always an easy environment to navigate and many barriers to trade exist 
throughout our key markets.
    The Administration recently released three updated reports 
detailing specific barriers our exporters must overcome when seeking 
new market opportunities. These reports, over 600 pages in total, 
illustrate just how challenging it can be for our producers to begin or 
continue exporting.
    Today we will be discussing five important market promotion 
programs designed to tackle non-tariff trade barriers. The Market 
Access Program, Foreign Market Development Program, Emerging Markets 
Program, Quality Samples Program, and the Technical Assistance for 
Specialty Crops program are each designed to assist various commodities 
and sectors.
    From our first panel we hope to gain greater clarity with regard to 
the changes that USDA has proposed for the Market Access and Foreign 
Market Development programs. We look forward to working with the 
administration to address ways the programs can be strengthened. We 
also look forward to receiving an update on how the Foreign 
Agricultural Service is fulfilling its core mission of expanding 
exports of U.S. agricultural goods.
    Our second panel is comprised of a diverse group of witnesses 
representing a cross section of agricultural exporters. We look forward 
to their insights on these programs, the challenges they are facing, 
and how they have leveraged these programs to increase exports.
    I look forward to the testimony that will be given today, and thank 
our witnesses again for being here this morning.

    The Chairman. And now I call on our distinguished Ranking 
Member, the gentleman from California and former Chairman of 
the appropriate Subcommittee here in the Agriculture Committee, 
Mr. Costa.

   OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. Costa. Thank you very much, Chairman Johnson, for 
calling this important Subcommittee hearing to review the 
market promotion programs, their effectiveness on expanding 
exports of U.S. agricultural products. The cornucopia of 
agricultural products that we grow in this nation clearly are 
the best in terms of quality and in terms of yield, and our 
ability to feed our nation and to export our products are an 
important part of maintaining a strong economic agricultural 
industry in our country.
    And I think we all believe in the importance of free 
markets. The problem that we have, of course, is that we 
compete in foreign markets in which there are tariffs and there 
are non-tariff barriers. So, this Subcommittee's hearing this 
morning is an important opportunity to point out many of those 
barriers that limit our farmers or ranchers, dairymen and 
dairywomen, the people who do this with wonderful, effective 
ability and with cutting-edge technologies to not only make a 
profit at home but to be able to also make a profit in selling 
their products abroad.
    We have a couple of witnesses who will testify in the 
second panel today from California, and obviously I am proud of 
those folks. We will introduce them at the appropriate time. I 
just want to underline, Mr. Chairman, your important role that 
you will play and that we all must in the Subcommittee, in 
ensuring that we connect American agriculture producers to the 
value-added agricultural businesses of all sizes and varieties 
to the world markets, and under the Federal Assistance Service, 
Foreign Assistance Service we know that there are important 
efforts that take place.
    Mr. Brewer, I will look forward to hearing your comments. 
These efforts, these programs help keep markets open for the 
long term while we work to establish new markets. As an 
example, we have in Northern California a very thriving rice 
industry, but they have worked for 20 years to develop markets 
in Japan. That is not easy because that is, in the Japanese 
instance, a staple crop, and they don't want to be dependent on 
foreign sources of rice, but yet we have been able to make 
inroads there.
    These programs help promote free and fair global trading in 
a system today that is dominated by the World Trade 
Organization, and oftentimes we have issues with the World 
Trade Organization. They help resolve non-tariff trade 
barriers, particularly as it relates to unique sanitary and 
phytosanitary challenges that we have in many of our specialty 
crops across the country. Oftentimes I believe that some 
countries raise as an issue of phytosanitary standards when it 
is really not an issue, but they use it to leverage on trade 
negotiations. I think our food that is grown here is the gold 
standard, frankly, in safety standards, on health and safety, 
but nonetheless, these issues get raised.
    So I look forward to hearing the testimony today from the 
panel witnesses. I look forward to continuing to work with my 
colleagues on this Subcommittee. It is an important 
Subcommittee, and Mr. Chairman, I know you are going to 
continue the guidance and leadership as we work on these issues 
together.
    Thank you.
    The Chairman. Thank you, Ranking Member Costa. As I look to 
see my colleagues on both sides of the aisle here really have 
four individuals whose districts are dramatically impacted by 
the subject matter of this hearing, so I appreciate all four of 
you being here and would request that any of you who have 
opening statements just submit them to the record so we can go 
ahead and proceed with the witnesses and assure there is enough 
time for your questions.
    I think just as an admonition, the indication is that we 
will probably start our votes, which will be a fairly short, as 
I understand it, a fairly short sequence, about 10:30, so 
hopefully we can act appropriately here.
    I would like to welcome our first panel, our first witness, 
Mr. John Brewer, the Administrator of the Foreign Agricultural 
Service, U.S. Department of Agriculture. Mr. Brewer, if you 
would like to begin, we welcome you, and we would be pleased to 
hear you.

 STATEMENT OF JOHN BREWER, ADMINISTRATOR, FOREIGN AGRICULTURAL 
                  SERVICE, U.S. DEPARTMENT OF
                 AGRICULTURE, WASHINGTON, D.C.

    Mr. Brewer. Well, thank you very much, Mr. Chairman.
    Mr. Chairman, Members of the Subcommittee, I am pleased to 
appear before you to discuss the trade programs administered by 
the U.S. Department of Agriculture.
    The Foreign Agricultural Service leads USDA efforts to 
expand foreign market access for U.S. products, build new 
markets, improve the competitive position of U.S. agriculture, 
and address food security and capacity building in foreign 
countries.
    FAS relies on its network of agricultural economists, 
market development experts, negotiators, and trade specialists, 
both in Washington and in its approximately 100 international 
offices that cover 156 countries. FAS attaches provide 
expertise to identify and seize opportunities and avert 
problems before they become trade barriers that impeded U.S. 
exports.
    FAS is proud of its contribution to growing U.S. 
agricultural exports. U.S. farm exports are expected to reach a 
record $135.5 billion in Fiscal Year 2011, eclipsing the 2008 
record by more than $20 billion. Importantly, every $1 billion 
in agricultural exports generates an additional $1.3 billion in 
economic activity and supports 8,400 American jobs.
    Agriculture plays an important role in supporting President 
Obama's National Export Initiative goal of doubling all U.S. 
exports within 5 years. As the President recently said, we know 
what it will take for America to win the future. We need to 
out-innovate, we need to out-educate, we need to out-build our 
competitors. We need an economy that is based not on what we 
consume and borrow from other nations, but what we make and 
what we sell around the world. USDA stands ready to meet this 
challenge.
    Our two largest FAS-administered economic export 
development programs are the Market Access Program, or MAP, and 
the Foreign Market Development Cooperator Program, or FMD. MAP 
forms partnerships with nonprofit agricultural trade 
organizations, agricultural cooperatives, nonprofit state 
regional trade groups, and small and medium-sized entities to 
share the costs of overseas marketing and promotional 
activities.
    The farm bill makes available $200 million for MAP this 
year. That amount is paired with industry contributions. In 
addition to generic promotions, MAP has a brand promotion 
component that funds over 600 small companies and agricultural 
cooperatives.
    For Foreign Market Development Cooperator Program, or FMD 
is a cost-share program that aids in the creation, expansion, 
and maintenance of long-term export markets for agricultural 
products. The farm bill makes available $34.5 million for FMD 
this year. The program fosters a partnership between USDA and 
U.S. producers and processors who are represented by nonprofit 
commodity or trade associations called cooperators.
    USDA and cooperators pool resources to conduct overseas 
market development to address long-term foreign import 
constraints and export growth opportunities. The economic 
impact of MAP and FMD is impressive. An FAS-commissioned cost-
benefit analysis concluded that U.S. agricultural experts 
increased by $35 for every dollar invested by government and 
industry on market development.
    A small but important program we administer called the 
Quality Samples Program assist U.S. agricultural in providing 
samples to potential importers overseas. QSP has introduced 
foreign buyers to a wide variety of U.S. commodities, including 
wheat, citrus, and cranberries. In Fiscal Year 2010, $1.89 
million of funding was allocated under QSP. The FAS-
administrated Emerging Markets Program improves market access 
and develops or promotes U.S. agricultural exports to low and 
middle income emerging markets. In Fiscal Year 2010, the EMP 
supported 83 projects with funding totaling $8.3 million.
    Last year the Technical Assistance for Specialty Crops or 
TASC Program assisted specialty crop producers in resolving 
numerous phytosanitary and related technical barriers. Under 
TASC U.S. exporters have regained market access for millions of 
dollars of products from almonds to spinach.
    I look forward to working with Congress. Agricultural trade 
remains a bright spot in the U.S. economy, consistently 
producing a trade surplus.
    This concludes my statement. I look forward to answering 
any questions you may have.
    [The prepared statement of Mr. Brewer follows:]

Prepared Statement of John Brewer, Administrator, Foreign Agricultural 
       Service, U.S. Department Of Agriculture, Washington, D.C.
    Mr. Chairman, Members of the Subcommittee, I am pleased to appear 
before you today. I welcome the opportunity to discuss the trade 
programs administered by the U.S. Department of Agriculture (USDA).
Introduction
    The Foreign Agricultural Service (FAS) is the lead agency of the 
U.S. Department of Agriculture (USDA) responsible for addressing the 
challenges and opportunities of the dynamic global marketplace by 
expanding foreign market access for U.S. products, building new 
markets, improving the competitive position of U.S. agriculture, and 
addressing food security and capacity building in foreign countries. 
FAS has the primary responsibility within USDA for international market 
development and export financing, trade agreements and negotiations, 
and the analysis and dissemination of vital market intelligence and 
data to agricultural producers and exporters. FAS administers food aid 
programs and mobilizes USDA's unique resources and expertise in 
agricultural development activities.
    FAS relies on its global network of agricultural economists, market 
development experts, negotiators and trade specialists both in 
Washington, DC, and its approximately 100 international offices that 
cover 156 countries. FAS attaches and counselors serving at U.S. 
Embassies are our eyes and ears around the world, providing the 
agricultural expertise to identify and seize opportunities, by 
capturing real-time information on emerging trade and market 
development issues, and averting problems before they become trade 
barriers that impede U.S. exports.
Importance of Maintaining and Expanding Agricultural Trade
    At FAS, we are proud of our contributions to growing U.S. 
agricultural exports. Last month Secretary Vilsack announced that U.S. 
farm exports are expected to reach a record $135.5 billion in Fiscal 
Year (FY) 2011, eclipsing the 2008 record by more than $20 billion. 
Compared to FY 2010, export value is expected to grow by 25 percent and 
volume by ten percent. The agricultural trade surplus is projected to 
reach a record $47.5 billion. Agriculture is a bright spot in the U.S. 
trade portfolio where we have been consistently running a trade 
surplus.
    These numbers are good news, not just for farmers and ranchers and 
the businesses and communities that support them, but for our nation's 
economy as a whole. Every $1 billion in agricultural exports generates 
an additional $1.31 billion in economic activity and supports 8,400 
American jobs. Agriculture continues to play an important role in 
support of President Obama's National Export Initiative goal of 
doubling all U.S. exports within 5 years.
    As the President recently said, ``We know what it will take for 
America to win the future. We need to out-innovate, we need to out-
educate, we need to out-build our competitors. We need an economy 
that's based not on what we consume and borrow from other nations, but 
what we make and what we sell around the world. We need to make America 
the best place on Earth to do business.'' USDA stands ready to meet 
this challenge.
    We must open, expand, and maintain access to foreign markets, where 
95 percent of the world's consumers live. Participants from all corners 
of the U.S. agricultural community utilize FAS-administered trade 
programs to reach these consumers, complementing Administration efforts 
to open and maintain markets through trade negotiations, diplomacy, and 
enforcement of trade agreements.
Market Development Programs
    FAS-administered export development programs include: the Market 
Access Program (MAP), Foreign Market Development (Cooperator) Program 
(FMD), Technical Assistance for Specialty Crops Program (TASC), Quality 
Samples Program (QSP), and Emerging Markets Program (EMP). These cost-
share programs provide partial matching funds to eligible U.S. 
organizations to conduct a range of activities, including market 
research, consumer promotion, maintaining and expanding relations with 
foreign buyers, market development, and market access support. This 
partnership in market development programs provides a long-term 
commitment to support U.S. producers and exporters to increase sales to 
current and potential customers in foreign markets. FAS staff assists 
U.S. agricultural trade associations and others to develop programs 
that build on effective strategic planning, involve broad industry 
representation, identify the best prospects for their products 
overseas, and show positive results.
Market Access Program (MAP)
    The largest market development program operated by the Department 
is the Market Access Program (MAP). MAP is a cost-share program that 
uses funds from USDA's Commodity Credit Corporation (CCC) to aid in the 
creation, expansion, and maintenance of foreign markets for U.S. 
agricultural products. MAP forms partnerships between nonprofit U.S. 
agricultural trade organizations, U.S. agricultural cooperatives, 
nonprofit State Regional Trade Groups, and small and medium-sized U.S. 
commercial entities to share the costs of overseas marketing and 
promotional activities, such as consumer promotions, market research, 
and trade show participation. The current farm bill makes available 
$200 million of CCC funds for MAP this year; that amount is paired with 
industry contributions. Applicants submit MAP proposals to USDA as part 
of a competitive Unified Export Strategy (UES) process, which allows 
applicants to request funding for various USDA foreign market 
development programs through a single, strategically coordinated 
proposal. One strength of the UES process is that utilizing the 
complementary nature of the various market development programs is 
emphasized. For example, using both MAP and Quality Sample Program 
(QSP) funds in a coordinated effort of technical support and test 
product, the Cranberry Marketing Committee has made great strides in 
developing the Mexican market by targeting food manufacturers. In just 
two years, 33 new products containing cranberries were introduced in 
Mexico, and U.S. cranberry exports increased by 42 percent in one year.
    In addition to generic promotions, MAP has a brand promotion 
component that provides export promotion funding to over 600 small 
companies and agricultural cooperatives annually. To conduct branded 
product promotion activities, individual companies must provide at 
least 50 percent of funding. Most small companies and agricultural 
producer cooperatives access market development programming through one 
of the four State Regional Trade Groups (SRTGs)--Food Export 
Association of the Midwest USA, Food Export USA Northeast, Southern 
United States Trade Association, and Western United States Agricultural 
Trade Association. The SRTGs work closely with the State Departments of 
Agriculture in their respective regions to identify eligible company 
participants and export opportunities, and then bring the two together. 
In that effort, SRTGs provide small companies with export readiness 
training and organize trade missions, as well as branded programming 
opportunities to directly access MAP funds for individual company 
promotions and trade show participation.
    WildRoots, a small healthy snack food company, with two production 
facilities in Illinois and one in Nebraska, matched MAP branded funds 
to market their products in Canada. Export sales soared from zero in 
2008 to over $4 million in 2010. The company buys blueberries from 
Michigan, corn and soy products from Illinois, oats from Nebraska, 
cranberries from Massachusetts, and almonds from California. According 
to a WildRoots co-founder, ``Without the branded program, we simply 
would never have been able to compete with Canadian producers. It has 
moved our business to a new level and has promoted U.S.-based 
agricultural products, creating jobs in an economy that desperately 
needs them.''
Foreign Market Development (Cooperator) Program (FMD)
    The Foreign Market Development (Cooperator) Program (FMD) is a 
cost-share program that aids in the creation, expansion, and 
maintenance of long-term export markets for U.S. agricultural products. 
The current farm bill makes available $34.5 million CCC funds for FMD 
this year. The program fosters a trade promotion partnership between 
USDA and U.S. agricultural producers and processors who are represented 
by nonprofit commodity or trade associations called Cooperators. Under 
this partnership, USDA and each Cooperator pool their technical and 
financial resources to conduct overseas market development activities 
that are generic in nature. Activities must contribute to the 
maintenance or growth of demand for the agricultural commodities and 
generally address long-term foreign import constraints and export 
growth opportunities. Programs focus on matters such as reducing 
infrastructural or historical market impediments, improving processing 
capabilities, modifying codes and standards, and identifying new 
markets or new applications or uses for the agricultural commodity or 
product in the foreign market. Twenty-one organizations representing a 
broad sample of U.S. agriculture, including peanuts, sunflower, 
soybeans, livestock genetics, dry beans, wheat, poultry, and rice, 
benefited from receiving a total of $34.15 million in Fiscal Year 2010 
through the FMD program.
    Through the FMD program, U.S. sunflower producers' activities are 
paying dividends in Spain. To increase awareness of confectionery 
sunflower seed and build demand in Spain, the National Sunflower 
Association (NSA) used FMD funding to create and implement an 
integrated and highly successful marketing program of trade 
advertisements, newsletters, trade shows, seminars, and trade missions. 
Through this work, U.S. sales to Spain reached nearly $270 million, 
making Spain the top market for U.S. confectionery sunflower seeds, and 
generating jobs in top sunflower producing states including Colorado, 
Kansas, Minnesota, North Dakota, Oklahoma, South Dakota, and Texas.
Economic Impact of MAP and FMD Programs
    The economic impact of the MAP and FMD programs is impressive. An 
FAS commissioned cost-benefit analysis in March 2010 concluded that the 
programs effectively leveraged private and public sector resources in a 
unique partnership to increase U.S. food and agricultural exports. The 
analysis concluded for the time period 2002 through 2009 that U.S. food 
and agricultural exports increased by $35 for every dollar invested by 
government and industry on market development. Additionally, U.S. 
agricultural exports in 2009 were $6.1 billion higher than they would 
have been without the increased investment in market development. The 
study also found that an estimated 47 percent of the programs' total 
trade impact accrued to commodities not receiving market development 
assistance--a phenomenon known as the ``halo'' effect. In other words, 
non-promoted U.S. commodities benefited from increased promotion of 
other U.S. commodities in the same market.
Quality Samples Program (QSP)
    The Quality Samples Program (QSP) helps U.S. agricultural trade 
organizations provide samples of their agricultural products to 
potential importers overseas, thus encouraging potential customers to 
discover U.S. quality. The QSP also allows manufacturers overseas to do 
test runs to assess how U.S. food and fiber products can best meet 
their production needs. USDA has approved QSP proposals to promote a 
wide variety of U.S. commodities, including wheat, citrus, cranberries, 
ginseng, hops, potatoes, hides, rice, and soybeans. Many other 
commodities are eligible. Organizations received funding allocations 
under QSP in Fiscal Year 2010 for approximately $1.89 million of CCC 
funds.
    One example of how QSP has fostered interest in U.S. product is 
sheepskin exports to China. The American Sheep Industry Association 
reports QSP as a key factor in convincing reluctant buyers to try U.S. 
sheepskins. Following QSP trials in China, two companies have become 
regular and consistent buyers of U.S. sheepskins. As of last year, U.S. 
sheepskin exports to China had increased significantly to 1.1 million 
pieces.
Emerging Markets Program (EMP)
    In 2010, the Emerging Markets Program (EMP) assisted Wisconsin 
ginseng growers battle counterfeits. For more than a decade, the 
Ginseng Board of Wisconsin (GBW) has struggled with Chinese 
counterfeiters selling fake Wisconsin Ginseng. With 90 percent of its 
exports going to China, the GBW moved aggressively to regain control of 
its brand. Using EMP, GBW initiated research to develop a technique to 
detect trace elements of ginseng's valuable root to Wisconsin or where 
it was grown originally; initial findings are promising.
    EMP is specifically designed to improve market access and develop 
or promote exports of U.S. agricultural commodities and products to low 
and middle income emerging markets through cost-share assistance to 
eligible applicants for approved technical assistance activities. 
Emerging markets are defined as those target countries or regional 
country groupings with per capita income of less than $11,905 (the 
current ceiling on upper middle income economies as determined by the 
World Bank) and populations greater than one million. Private, Federal, 
and state organizations are eligible to participate in EMP. For Fiscal 
Year 2010, the EMP program supported 83 agricultural export promotion 
projects with funding totaling $8.3 million.
Technical Assistance for Specialty Crops (TASC)
    Last year, the Technical Assistance for Specialty Crops (TASC) 
program was instrumental in assisting the U.S. potato exporters in 
overcoming a Thai phytosanitary protocol that was preventing U.S. 
exports from certain states. Following several months of negotiations 
between the Thailand Department of Agriculture and USDA, the U.S. 
Potato Board (USPB) used TASC to arrange for Thai officials to visit 
the U.S. and review U.S. seed certification procedures, seed 
cultivation practices and phytosanitary mitigation measures. Following 
this activity, Thailand agreed to additional market access that more 
than doubles--to fourteen--the number of states eligible to export seed 
potatoes to Thailand. Seed potatoes from Colorado, Maine, Michigan, 
Minnesota, Montana, Nebraska, New York, North Dakota, Wisconsin and 
Wyoming may now be exported to Thailand. FAS estimates sales of 
$250,000 to $500,000 during the first year of Thai market access, while 
the USPB estimates that expanded market access could boost exports to 
Thailand to $1 million in 3 to 5 years.
    Another example is U.S. hops exports to Canada. With more than $18 
million in hops exports, Canada is the fifth largest export market for 
U.S. producers. In response to limited pesticide tolerances in Canada 
that potentially threatened trade, TASC funds supported U.S. hops 
industry efforts to work with regulators in Canada in establishing five 
new hops-related maximum residue levels in Canada for pesticides 
critical to U.S. hop production. The Canadian tolerances were set at 
safe levels that allow U.S. hop growers to apply essential U.S. crop 
protection tools that significantly reduce the risk of shipping hops to 
Canada. Given that over half of U.S. hop production is exported, the 
setting of pesticide tolerances in one of the industry's most crucial 
export markets has been vital for this industry.
    These are just two examples of how U.S. exports have grown as 
sanitary, phytosanitary, and technical barriers that denied market 
access to U.S. agricultural products were resolved successfully. The 
TASC program assists U.S. food and agricultural organizations in 
addressing phytosanitary and technical barriers that prohibit or 
threaten the export of U.S. specialty crops. Using TASC, USDA has 
successfully helped U.S. exporters regain market access for millions of 
dollars of products from almonds to spinach. The current farm bill 
provides $9 million in CCC funds for the TASC program this year.
Export Credit Guarantee Program (GSM-102)
    FAS, in conjunction with the Farm Service Agency, administers the 
CCC-funded export credit guarantee program (GSM-102) for commercial 
financing of U.S. agricultural exports. The GSM-102 program facilitates 
exports to buyers in countries where credit is necessary to maintain or 
increase U.S. sales. In FY 2010, guarantees covered $3.09 billion in 
sales that ran the gamut from corn to Costa Rica to soybeans to 
Indonesia and from wheat to Nigeria to wood chips to Turkey. In FY 
2011, we expect to make available approximately $5.5 billion in GSM-102 
guarantees for U.S. agricultural exporters to target sales to over 100 
eligible country destinations.
Conclusion
    As Administrator of USDA's Foreign Agricultural Service, I am proud 
of our efforts to improve foreign market access for U.S. products, 
build new markets, and improve the competitive position of U.S. 
agriculture in the global marketplace. We look forward to continue 
working with Congress in support of our efforts to open markets around 
the world for U.S. agricultural products. Agricultural trade remains a 
bright spot in the U.S. economy, consistently producing a trade surplus 
and creating American jobs. As Secretary Vilsack said, ``Our export 
success is a testament to the productivity of our farmers and ranchers 
and underscores the quality and value of U.S. farm and food products.''
    This concludes my statement. I look forward to answering any 
questions you may have. Thank you.
                              Attachments
Market Access Program
    The Market Access Program (MAP) uses funds from the U.S. Department 
of Agriculture's (USDA) Commodity Credit Corporation (CCC) to aid in 
the development, expansion, and maintenance of foreign markets for U.S. 
agricultural commodities and products. The MAP is authorized by Section 
203 of the Agricultural Trade Act of 1978, and is administered by 
USDA's Foreign Agricultural Service (FAS).
    The MAP forms a partnership between nonprofit U.S. agricultural 
trade associations, nonprofit U.S. agricultural cooperatives, nonprofit 
state-regional trade groups, small U.S. businesses, and USDA's CCC to 
share the costs of overseas marketing and promotional activities, such 
as trade shows, market research, consumer promotions, technical 
assistance, trade servicing, and seminars to educate overseas 
customers.
    How the program benefits U.S. agriculture: Each year, the MAP helps 
launch and expand sales of U.S. agricultural, fish, and forest products 
overseas. American farmers, ranchers, and food processors and 
manufacturers benefit from the MAP. The MAP benefits all regions of the 
country through increased exports and rural job expansion.
    How the program works: The MAP uses funds from the USDA's CCC to 
cost share foreign market promotion activities with program 
participants. The Food, Conservation, and Energy Act of 2008, enacted 
into law in June 2008, set funding for the MAP at $200 million annually 
through Fiscal Year 2012. Each year, USDA announces an application 
period for participation in the MAP, publishing an announcement in the 
Federal Register. Applicants develop MAP proposals and submit them to 
USDA as part of the Unified Export Strategy (UES) process, which allows 
applicants to request funding for various USDA foreign market 
development programs through a single, strategically coordinated 
proposal.
    MAP applications undergo a competitive review process based on 
criteria specified in the Federal Register announcement. Funds are 
awarded to applicants that demonstrate effective performance based on a 
clear, long-term strategic plan. FAS sets a program funding level and 
signs a program agreement with each participant. Participants must keep 
an itemized list of expenses incurred during the program year and 
submit them to FAS for reimbursement. Expenses are subject to audits, 
and participants are held accountable for maintaining proper 
documentation.
    Agricultural cooperatives and small companies can receive 
assistance under the brand program. A for-profit firm, other than a 
cooperative or producer association shall be a small-sized entity that 
either owns the brand of the agricultural commodity to be promoted or 
has the exclusive rights to use such brand(s). To conduct branded 
product promotion activities, individual companies must provide at 
least 50 percent of funding. MAP regulations limit the promotion of 
branded products in a single country to no more than 5 years. For 
generic promotion activities, trade associations and others must meet a 
minimum ten percent match requirement. Participants are required to 
certify that Federal funds used under the program supplement--not 
replace--private sector funds.
    What commodities are covered: USDA has approved MAP proposals to 
promote a wide variety of U.S. commodities in almost every region of 
the world. Among those U.S. food and fiber products are apples, 
asparagus, canned peaches, fruit cocktail, catfish, cherries, citrus, 
cotton, dairy products, dry beans, eggs, feed grains, frozen potatoes, 
grapes, honey, hops, kiwifruit, meat, peanuts, pears, pet food, 
pistachios, poultry meat, prunes, raisins, rice, salmon, soybeans, 
strawberries, sunflower seeds, surimi, tallow, tomato products, 
walnuts, watermelons, and wheat.
    Where to get information: For more information about the MAP, 
contact the Office of Trade Programs at (202) 720-4327, or visit the 
following website at
http://www.fas.usda.gov/mos/programs/map.asp.
    Information on FAS programs, trade data, and reports are available 
by accessing the FAS Home Page at: http://www.fas.usda.gov.

           Fiscal Year 2010 Market Access Program Allocations
------------------------------------------------------------------------
                                                      Total FY 2010
                  Participant                           Allocation
------------------------------------------------------------------------
Alaska Seafood Marketing Institute                            $4,631,151
The American Hardwood Export Council, The                     $8,356,971
 Engineered Wood Association, The Softwood
 Export Council, & The Southern Forest & Paper
 Association
American Peanut Council                                       $2,175,613
American Seed Trade Association                                  $29,701
American Sheep Industry Association                             $410,298
American Soybean Association                                  $5,751,073
Blue Diamond Growers/Almond Board of California               $1,591,718
Brewers Association Inc.                                        $371,779
California Agricultural Export Council                          $859,622
California Asparagus Commission                                 $141,734
California Cherry Advisory Board                                $574,344
California Cling Peach Board                                    $484,924
California Fresh Tomato Growers/Florida Tomato                  $914,485
 Committee
California Kiwifruit Commission                                 $302,141
California Pear Advisory Board                                  $470,612
Cal-Pure Pistachios/Western Pistachio                           $928,895
 Association
California Prune Board                                        $3,660,254
California Strawberry Commission                                $800,092
California Table Grape Commission                             $3,580,772
California Tree Fruit Agreement                               $2,498,896
California Walnut Commission                                  $4,622,088
Cherry Marketing Institute                                      $266,847
Cotton Council International                                 $20,645,807
Cranberry Marketing Committee                                 $1,657,476
Distilled Spirits Council                                       $190,624
Florida Department of Citrus                                  $5,284,889
Food Export Association of the Midwest USA                   $10,691,360
Food Export USA Northeast                                     $7,902,946
Ginseng Board of Wisconsin                                      $186,065
Hawaii Papaya Industry Association                              $138,654
Hop Growers of America                                          $190,321
Intertribal Agriculture Council                                 $825,196
Mohair Council of America                                       $118,256
National Association of State Department of                   $3,676,089
 Agriculture
National Confectioners Association                            $1,420,238
National Hay Association                                         $36,555
National Potato Promotion Board                               $5,231,810
National Renderers Association                                  $824,664
National Sunflower Association                                $1,168,455
National Watermelon Promotion Board                             $235,408
New York Wine and Grape Foundation                              $361,829
Northwest Wine Promotion Coalition                              $941,717
Organic Trade Association                                       $376,953
Pear Bureau Northwest                                         $3,496,630
Pet Food Institute                                            $1,460,439
Raisin Administrative Committee                               $3,274,710
Southern United States Trade Association                      $6,579,951
Sunkist Growers, Inc.                                         $4,072,982
Texas Produce Export Association                                $105,344
The Catfish Institute                                           $290,442
The Popcorn Board                                               $250,738
U.S. Apple Export Council                                       $885,335
U.S. Dairy Export Council                                     $4,515,671
U.S. Dry Bean Council                                         $1,079,781
U.S. Grains Council                                           $8,232,494
U.S. Hide, Skin & Leather Association                           $107,918
U.S. Livestock Genetics Exports, Inc.                           $968,886
U.S. Meat Export Federation                                  $16,495,353
U.S. Wheat Associates                                         $5,790,604
USA Dry Pea and Lentil Council                                $1,008,314
USA Poultry and Egg Export Council                            $5,218,646
USA Rice Federation/U.S. Rice Producers                       $3,834,882
 Association
Washington State Fruit Commission                             $1,128,068
Washington Apple Commission                                   $5,381,945
Welch Foods, Inc.                                               $907,177
Western United States Agricultural Trade                      $9,674,062
 Association
Wine Institute                                                $7,152,261
                                                ------------------------
  Total                                                     $197,441,955
------------------------------------------------------------------------




-------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) prohibits discrimination
 in all its programs and activities on the basis of race, color,
 national origin, gender, religion, age, disability, political beliefs,
 sexual orientation, and marital or family status. (Not all prohibited
 bases apply to all programs.) Persons with disabilities who require
 alternative means for communication of program information (Braille,
 large print, audiotape, etc.) should contact USDA's TARGET Center at
 (202) 720-2600 (voice and TDD).
    To file a complaint of discrimination, write USDA, Director, Office
 of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
 Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
 TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

                                 ______
                                 
Foreign Market Development Cooperator Program
    The Foreign Market Development Cooperator (FMD) Program uses funds 
from the U.S. Department of Agriculture's (USDA) Commodity Credit 
Corporation (CCC) to create, expand, and maintain long-term export 
markets for U.S. agricultural products. First established under the 
authority of Public Law 480, the FMD was re-authorized by Title VII of 
the Agricultural Trade Act of 1978, and is administrated by USDA's 
Foreign Agricultural Service (FAS).
    The program has fostered a cost-sharing trade promotion partnership 
between USDA and U.S. agricultural producers and processors, who are 
represented by nonprofit commodity or trade associations called 
Cooperators. FAS enters into partnerships with those eligible nonprofit 
U.S. trade organizations that have the broadest producer representation 
of the commodity being promoted. Under this partnership, USDA and the 
Cooperators pool their technical and financial resources to conduct 
overseas market development.
    How the program benefits U.S. agriculture: The FMD benefits U.S. 
farmers, processors, and exporters by assisting their organizations in 
maintaining or increasing market share in existing markets by 
addressing long-term foreign market import constraints and by 
identifying new markets or new uses for the agricultural commodity or 
product in the foreign market. Overseas promotions focus on generic 
U.S. commodities, rather than brand-name products, and are targeted 
toward long-term development.
    How the program works: Under the FMD, CCC funds partially reimburse 
cooperators for conducting approved overseas promotional activities. 
Preference is given to nonprofit U.S. agricultural and trade groups 
that represent an entire industry or are nationwide in membership and 
scope.
    Each year USDA announces an application period for participation in 
the FMD program and publishes it in the Federal Register. Proposals are 
developed by trade organizations and may be submitted to USDA as part 
of the Unified Export Strategy (UES) process, which allows applicants 
to request funding for several USDA foreign market development programs 
using a single, strategically coordinated proposal. FMD regulations (7 
CFR 1484) define program requirements, including cost-sharing, 
strategic planning, reimbursement procedures, records and reporting 
requirements, and evaluations.
    FMD applications undergo a competitive review process. Funds are 
awarded to applicants that demonstrate effective performance based on a 
clear long-term strategic plan. Cooperators must keep an itemized list 
of expenses incurred during the program year and submit them to USDA 
for reimbursement. All expenses are subject to audits, and Cooperators 
are accountable for maintaining proper documentation.
    Where to get information: For more information on the FMD program, 
contact the Office of Trade Programs at (202) 720-4327, or visit the 
following website at
http://www.fas.usda.gov/mos/programs/fmdprogram.asp.
    General information about FAS programs, resources, and services is 
available on the Internet at the FAS home page: http://
www.fas.usda.gov.

     Fiscal Year 2010 Foreign Market Development Program Allocations
------------------------------------------------------------------------
                                                      Total FY 2010
                   Cooperator                           Allocation
------------------------------------------------------------------------
The American Hardwood Export Council, The                     $3,530,482
 Engineered Wood Association, The Softwood
 Export Council, & The Southern Forest & Paper
 Association
American Peanut Council                                         $737,985
American Seed Trade Association                                 $228,073
American Sheep Industry Association                             $183,479
American Soybean Association                                  $7,273,160
Cotton Council International                                  $5,052,334
Leather Industries of America                                   $162,157
Mohair Council of America                                        $15,768
National Hay Association                                         $78,325
National Renderers Association                                  $945,818
National Sunflower Association                                  $259,748
North American Millers' Association                              $60,797
U.S. Dairy Export Council                                       $752,301
U.S. Dry Bean Council                                           $138,264
U.S. Grains Council                                           $4,342,466
U.S. Hide, Skin and Leather Association                         $155,983
U.S. Livestock Genetics Export, Inc.                            $763,923
U.S. Meat Export Federation                                   $1,846,115
U.S. Wheat Associates                                         $4,178,916
USA Dry Pea and Lentil Council                                  $185,694
USA Poultry and Egg Export Council                            $1,613,144
USA Rice Federation                                           $1,645,068
                                                ------------------------
  Total                                                      $34,150,000
------------------------------------------------------------------------




-------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) prohibits discrimination
 in all its programs and activities on the basis of race, color,
 national origin, gender, religion, age, disability, political beliefs,
 sexual orientation, and marital or family status. (Not all prohibited
 bases apply to all programs.) Persons with disabilities who require
 alternative means for communication of program information (Braille,
 large print, audiotape, etc.) should contact USDA's TARGET Center at
 (202) 720-2600 (voice and TDD).
    To file a complaint of discrimination, write USDA, Director, Office
 of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
 Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
 TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

                                 ______
                                 
Emerging Markets Program
    The Emerging Markets Program (EMP) is a market access program that 
provides funding for technical assistance activities intended to 
promote exports of U.S. agricultural commodities and products to 
emerging markets in all geographic regions, consistent with U.S. 
foreign policy. The program is authorized by the Food, Agriculture, 
Conservation, and Trade Act of 1990, as amended. The EMP regulations 
appear at 7 CFR part 1486. Funding is set at $10 million each fiscal 
year from the Commodity Credit Corporation from now through the end of 
the current farm bill.
    The EMP is a generic program. Its resources may be used to support 
exports of U.S. agricultural commodities and products only through 
generic activities. Projects that endorse or promote branded products 
are not eligible for the Program.
    Funding is provided through three channels: (1) the Central Fund, 
the principle means of funding, made available through a public 
announcement; (2) the Technical Issues Resolution Fund (TIRF), to 
address technical barriers to those issues that are time sensitive and 
are strategic areas of longer term interest; and (3) the Quick Response 
Marketing Fund (QRMF), to assist with short-term time-sensitive 
marketing opportunities.
    What is an Emerging Market? The legislation defines an emerging 
market as any country that ``is taking steps toward a market-oriented 
economy through the food, agriculture, or rural business sectors of the 
economy of the country,'' and ``has the potential to provide a viable 
and significant market for United States commodities or products of 
United States agricultural commodities.''
    There is no fixed list of ``emerging market'' countries. Because 
funds are limited and the range of emerging markets is worldwide, the 
Program uses certain administrative criteria, in addition to the legal 
definition above, to determine whether a country is considered an 
emerging market:

    (1) Per capita income of less than $12,195, the current ceiling on 
        upper middle income economies as determined by the World Bank.

    (2) Population greater than one million (may encompass regional 
        groupings, such as the islands of the Caribbean Basin).

    Guidance on qualified emerging markets is provided each year in the 
Program's application announcement.
    Program Priorities: The principal purpose of the program is to 
assist U.S. organizations, public and private, to improve market access 
by developing, maintaining, or enhancing U.S. exports to low- and 
middle-income countries which have or are developing market-oriented 
economies, and which can be viable markets for these products. The 
underlying premise is that emerging agricultural markets have 
distinctive characteristics that benefit from U.S. governmental 
assistance before the private sector moves to develop these markets 
through normal trade promotional activities. All agricultural 
commodities except tobacco are eligible for consideration.
    Cost-share, the funding U.S. private organizations are willing to 
commit from their own resources to seek export business in an emerging 
market, is one of the requirements needed in an application in order to 
qualify for funding assistance under the EMP. Justification for Federal 
funding is also required.
    Types of Projects and Activities: Funding is on a project-by-
project basis. Many types of technical assistance activities that 
promote markets for U.S. agricultural products may be eligible for 
funding. Examples include feasibility studies, market research, 
sectorial assessments, orientation visits, specialized training, and 
business workshops. The program is not intended for projects targeted 
at end-user consumers. Ineligible activities include in-store 
promotions; restaurant promotions; branded product promotions 
(including labeling and supplementing normal company sales activities 
designed to increase awareness and stimulate sales of branded 
products); equipment purchases; costs of new product development; 
administrative and operational expenses for trade shows; advertising; 
preparation and printing of brochures, flyers, posters, etc., except in 
connection with specific technical assistance activities, such as 
training seminars; and design and development of Internet websites.
    The program complements other FAS marketing programs. Once a market 
access issue has been addressed by the EMP, further market development 
activities may be considered under other FAS programs.
    Eligible Organizations: Any U.S. agricultural or agribusiness 
organization, university, state department of agriculture, or USDA 
agency (or other Federal agency involved in agricultural issues) is 
eligible to participate in the EMP. Preference will be given to 
proposals indicating significant support and involvement by private 
industry. Proposals will be considered from research and consulting 
organizations only as long as they can demonstrate evidence of 
substantial participation by U.S. industry. For-profit entities are 
also eligible, but may not use program funds to conduct private 
business, promote private self-interests, supplement the costs of 
normal sales activities, or promote their own products or services 
beyond specific uses approved for a given project. USDA market 
development cooperators may seek funding to address priority, market-
specific issues or to undertake activities not already serviced by or 
unsuitable for funding under other FAS marketing programs, such as the 
Foreign Market Development Program and Market Access Program.
    The opportunities for applying to the EMP during the annual open 
solicitation periods are announced in the Federal Register and on the 
FAS website.
    Advisory Committee on Emerging Markets: A private sector advisory 
committee provides information and advice to help USDA develop 
strategies for providing technical assistance and enhancing markets for 
U.S. agricultural products in developing markets. More specifically, 
committee members review, from a non-governmental perspective, certain 
qualified proposals submitted for EMP funding assistance. The Secretary 
of Agriculture appoints members to the Committee for 2 year terms.
    More Information: Further details on the EMP, including the funding 
options under the program (the Central Fund, the Technical Issues 
Resolution Fund, and the Quick Response Marketing Fund), additional 
qualification requirements, the application and proposal review 
process, and administrative policies and procedures are contained in 
the Program Regulations, on the FAS Internet site below. For additional 
information, contact the USDA-FAS Program Operations Division, Grant 
Programs Branch, Phone: (202) 720-4327, Fax: (202) 720-9361, E-mail: 
[email protected], Internet: http://www.fas.usda.gov/mos/em-
markets/em-markets.asp.

          Fiscal Year 2010 Emerging Markets Program Allocations
------------------------------------------------------------------------
           Market                     Activity Title            Amount
------------------------------------------------------------------------
Bangladesh                    Cotton USA Technical              $200,000
                               Assistance Initiative in
                               Bangladesh for the Cotton
                               Council International
Brazil                        Brazil Craft Beer School           $30,000
                               Seminars for the Brewers
                               Association
Brazil                        Market Feasibility Study of        $15,041
                               Brazil for the Alaska
                               Seafood Marketing Institute
China                         Food Consumption in China's       $468,600
                               Second-Tier Cities: The New
                               Frontier for U.S.
                               Agricultural Export
                               Opportunities for the
                               University of Florida
China                         Exporting U.S. Dairy Genetics     $277,632
                               to China for Cooperative
                               Resources International
China                         Hotel, Restaurant, and            $212,000
                               Institutional Sector
                               Development for USDA/Foreign
                               Agricultural Service/Chengdu
China                         Distributor Development           $183,000
                               Program for Emerging City
                               Markets for USDA/Foreign
                               Agricultural Service
China                         Global Food Safety Forum:         $174,431
                               China Exchange for the GIC
                               Group
China                         Phase Three of the China Moon     $120,000
                               Cake Project for the
                               California Agricultural
                               Export Council
China                         Fresh Produce in China:           $101,011
                               Identifying Logistic
                               Constraints and Consumer
                               Trends for SIAM
                               Professionals, LLC
China                         Turkey Market Development in       $90,000
                               China--Expanding Demand for
                               U.S. Turkey in China by
                               Increasing its Use in Local
                               Cuisine for the Minnesota
                               Department of Agriculture
China                         China Familiarization Tour of      $90,000
                               Organic Farms, Retail, and
                               Processors for the Organic
                               Trade Association
China                         China Pecan Project for the        $70,800
                               Georgia Pecan Growers
                               Association
China                         Implementation of Science-         $52,560
                               based Principles in Risk
                               Management for USDA/Foreign
                               Agricultural Service
China                         Assessment of Exports of           $79,818
                               Hawaii Fresh and Processed
                               Agricultural Products to
                               China Markets Under a
                               Memorandum of Understanding
                               with the Chinese Ministry of
                               Commerce, Beijing
                               International Brand
                               Management Center for the
                               Hawaii Department of
                               Agriculture
China                         China Beer Distributors            $35,000
                               Education Program for the
                               Brewers Association
China                         China Food Safety Law              $27,406
                               Training for USDA/Foreign
                               Agricultural Service
China                         Reverse Trade Mission of           $14,400
                               Chinese Tanneries for the
                               U.S. Hide, Skin and Leather
                               Association
Egypt                         Food and Drug Administration        $4,690
                               Middle East and North Africa
                               Food Safety Workshop for
                               Regulators for USDA/Foreign
                               Agricultural Service
El Salvador                   U.S. Rice Market Research for      $31,000
                               the U.S. Rice Producers
                               Association
Ghana                         Ghana Lake Volta Soy in            $96,475
                               Aquaculture Program for the
                               American Soybean Association
Global Emerging Markets       Exploratory Market Research       $259,000
                               To Identify Opportunities
                               and Launch Preliminary Trade
                               Servicing, Education, and/or
                               Promotional Activities in
                               Emerging Markets for the
                               U.S. Apple Export Council
Global Emerging Markets       Exporting Genomic-Proven U.S.     $206,100
                               Dairy Genetics, Enhancing
                               Producer Product Knowledge,
                               Demonstrating U.S. Genomic
                               Sire Proofs and the New
                               Generation of Dairy Sires
                               for Cooperative Resources
                               International
Global Emerging Markets       Global Pesticide Tolerance        $196,770
                               Initiative for U.S.
                               Specialty Crops: Technical
                               and Policy Guidance to
                               Emerging Markets for USDA/
                               Foreign Agricultural Service
Global Emerging Markets       Technical Support for U.S.        $195,000
                               Seed Potato Exports,
                               Introduction of Cut Seeds to
                               Foreign Markets for the
                               National Potato Promotion
                               Board
Global Emerging Markets       Foreign Country Audits of         $184,400
                               U.S. Red Meat Facilities for
                               the U.S. Meat Export
                               Federation
Global Emerging Markets       Worldwide Market Development       $60,000
                               for the Northwest Wine
                               Promotion Coalition
Global Emerging Markets       Access and Benefit Sharing         $55,566
                               for Genetic Resources Used
                               in U.S. Food and Agriculture
                               Exports for USDA/Foreign
                               Agricultural Service
Global Emerging Markets       Translations of Foreign World      $52,000
                               Trade Organization Sanitary
                               and Phytosanitary and
                               Technical Barriers to Trade
                               Notifications for USDA/
                               Foreign Agricultural Service
Global Emerging Markets       Advancing U.S. Positions on         $9,880
                               Pesticide Regulatory
                               Standards for USDA/Foreign
                               Agricultural Service
Guatemala                     U.S. Rice Market Research for      $31,000
                               the U.S. Rice Producers
                               Association
India                         India Food Safety Seminars         $89,175
                               for USDA/Foreign
                               Agricultural Service
India                         Reverse Trade Mission for          $75,438
                               Retailers and Wholesalers
                               from India for the Produce
                               Marketing Association
India                         India Export Market                $75,000
                               Opportunity Assessment and
                               Familiarization Tour for the
                               Organic Trade Association
India                         India Retail Education             $60,000
                               Activities Reverse Mission
                               Retail Training Seminars for
                               the Pear Bureau Northwest
India                         India Pecan Project for the        $55,200
                               Georgia Pecan Growers
                               Association
Indonesia                     Indonesia-U.S. Partnership:        $51,000
                               Agricultural Technology and
                               Investment Forum for the
                               Texas A&M Norman Borlaug
                               Institute
Indonesia                     Technical Assistance for the       $41,014
                               Republic of Indonesia's
                               National Agency for Drug and
                               Food Control to Better
                               Understand the U.S. System
                               To Ensure the Safety of
                               Processed Foods for USDA/
                               Foreign Agricultural Service
Indonesia                     Product Introduction, Care         $14,000
                               and Handling, and
                               Merchandising Technique
                               Seminars for Fresh Sweet
                               Cherries for the Washington
                               State Fruit Commission
Iraq                          Trade Mission to Iraq for         $137,352
                               USDA/Foreign Agricultural
                               Service
Jamaica                       U.S. Technical and Regulatory      $17,676
                               Orientation for Jamaican
                               Food Import Authorities for
                               USDA/Foreign Agricultural
                               Service/Dominican Republic
Malaysia                      Agricultural Biotechnology        $130,535
                               Outreach to Malaysian
                               Officials for USDA/Foreign
                               Agricultural Service/Kuala
                               Lumpur
Malaysia                      Technical Workshop on Coated       $56,086
                               Foods Applications for the
                               USA Dry Pea and Lentil
                               Council
Mongolia                      2010 Microbiology and              $21,650
                               International Residue
                               Training Seminars for
                               International Government
                               Laboratory Officials for
                               USDA/Foreign Agricultural
                               Service/Beijing
Mongolia                      Food Safety and Inspection         $21,650
                               Service Meat and Poultry
                               Inspection Seminar for USDA/
                               Foreign Agricultural Service/
                               Beijing
Nigeria, Senegal, Cameroon    Increasing Access to U.S. Soy     $250,000
                               Products in Nigeria,
                               Senegal, and Cameroon for
                               the American Soybean
                               Association
Pakistan                      U.S. Soy Food Product             $152,224
                               Promotion in Pakistan for
                               the American Soybean
                               Association
Pakistan                      Opening Pakistan to U.S.          $111,755
                               Dairy and Genetics for World
                               Wide Sires, Ltd.
Philippines                   Philippines Agricultural           $63,584
                               Biotechnology Regulatory
                               Outreach for USDA/Foreign
                               Agricultural Service/Manila
Poland                        Second Phase of Market            $100,000
                               Development in Poland for
                               California Almonds for the
                               Almond Board of California
Regional: Asia-Pacific        APEC High-Level Policy            $153,936
 Economic Cooperation (APEC)   Dialogue Workshop on
                               Approaches and Tools To
                               Promote Investment in
                               Agricultural Biotechnology
                               for USDA/Foreign
                               Agricultural Service
Regional: APEC                APEC Export Certification         $108,800
                               Roundtable for USDA/Foreign
                               Agricultural Service
Regional: APEC                APEC High-Level Policy            $187,174
                               Dialogue on Agricultural
                               Biotechnology for USDA/
                               Foreign Agricultural Service
Regional: Caribbean Basin     Central American                  $142,356
                               Microbiological Standards
                               Program for USDA/Foreign
                               Agricultural Service
Regional: Caribbean Basin     Maintaining Access for U.S.        $96,270
                               Exports to the Caribbean for
                               USDA/Foreign Agricultural
                               Service
Regional: Caribbean Basin     Caribbean Food Safety Program      $93,300
                               for USDA/Foreign
                               Agricultural Service
Regional: Central America-    Food Safety Standard-Setting       $97,400
 Dominican Republic Free       Training for Participants in
 Trade Agreement (CAFTA-DR)    CAFTA-DR for USDA/Foreign
                               Agricultural Service
Regional: Latin America       Furthering Approvals of           $413,785
                               Genetically Engineered
                               Plants Through Promotion of
                               Data Transportability for
                               the International Life
                               Sciences Institute Research
                               Foundation
Regional: Latin America       U.S. Outreach Effort To           $157,378
                               Influence Negotiation by
                               Parties to the Cartagena
                               Protocol for Biosafety for
                               USDA/Foreign Agricultural
                               Service
Regional: Latin America       Inter-American Institute for
                               Cooperation on Agriculture
                               (http://www.iica.int/Eng/
                               Pages/default.aspx)
                              Workshop for Latin America         $72,140
                               Countries on the Annex (LLP
                               Annex) to the Codex
                               Guideline for the Conduct of
                               Food Safety Assessment of
                               Foods Derived from
                               Recombinant-DNA Plants for
                               USDA/Foreign Agricultural
                               Service
Regional: Latin America       Promotion of Consumer-             $56,462
                               Oriented Agricultural
                               Products for Latin America
                               through the International
                               Supermarket Management Class
                               for IGA International, Inc.
Regional: Latin America,      Western Hemisphere Codex          $103,310
 Caribbean Basin               Delegates' Colloquium for
                               USDA/Foreign Agricultural
                               Service
Regional: Latin America,      Enhancing Latin American and      $100,000
 Caribbean Basin               Caribbean Participation in
                               Codex for USDA/Foreign
                               Agricultural Service
Regional: Southeast Asia      Southeast Asia Fruit and          $223,218
                               Vegetable Consumer Trends,
                               Preferences Research for the
                               Washington Apple Commission
Regional: Southeast Asia      Increasing Understanding of       $137,850
                               U.S. and International
                               Flavor Safety Evaluation
                               Processes for the Flavor and
                               Extract Manufacturers
                               Association
Regional: Southeast Asia      Baking with Pea Flour in           $63,573
                               Southeast Asia for the USA
                               Dry Pea and Lentil Council
Regional: Southeast Asia      Nutritional and Technical          $46,820
                               Information on Dry Beans for
                               Southeast Asian Buyers for
                               the U.S. Dry Bean Council
Regional: Southeast Asia      Second Phase of U.S. Dairy in      $37,667
                               Selected Asian Bakery
                               Markets Project for the
                               California Milk Advisory
                               Board
Russia                        Review of U.S. Poultry            $120,000
                               Slaughter and Cold Storage
                               Facilities for the USA
                               Poultry and Egg Export
                               Council
Russia                        Russia Retail Education            $87,200
                               Activities Reverse Mission
                               Retail Training Seminars for
                               the Pear Bureau Northwest
Russia                        Research To Identify               $70,000
                               Opportunities and Launch
                               Trade Servicing, Education,
                               and Promotion in Russia for
                               the California Prune Board
Russia                        U.S.-Russia Bilateral              $26,342
                               Consultative Mechanism on
                               Biotechnology Technical
                               Exchange Meeting for USDA/
                               Foreign Agricultural Service
South Africa, Mauritius,      Southern Africa Biotechnology     $109,265
 Zimbabwe, Mozambique          Outreach for South Africa,
                               Mauritius, Zimbabwe, and
                               Mozambique for USDA/Foreign
                               Agricultural Service/
                               Pretoria
Sri Lanka                     Prospecting for U.S.               $84,206
                               Feedstuff and Soymeal Sales
                               in Sri Lanka for the Iowa
                               Soybean Association
Sri Lanka                     Biotechnology Training for          $5,000
                               Senior Level Sri Lankan
                               Officials for USDA/Foreign
                               Agricultural Service
Thailand                      Thailand Importer Developer       $185,535
                               Program for the Southern
                               United States Trade
                               Association
Thailand                      Technical Support to U.S.          $84,235
                               Frozen Potato Tariff
                               Reduction Efforts in
                               Thailand for the National
                               Potato Promotion Board
Thailand                      Restrictive Labeling               $36,450
                               Requirements for Alcoholic
                               Beverages to Thailand for
                               USDA/Foreign Agricultural
                               Service
Turkey                        Biotech Speakers for Istanbul      $38,680
                               Seminar and Public Outreach
                               for USDA/Foreign
                               Agricultural Service/Ankara
Turkey                        U.S. Dairy Genetics to             $22,551
                               Turkey, Overcoming
                               Unjustifiable Regulatory
                               Barriers for the National
                               Association of Animal
                               Breeders
Turkey                        Expanding Indiana Hardwood         $20,900
                               Exports in Turkey for the
                               Indiana State Department of
                               Agriculture
Vietnam                       Vietnamese Wet Blue Buyers         $32,450
                               Team to the United States
                               for the Leather Industries
                               of America
------------------------------------------------------------------------
    Total Allocations                                         $8,193,172
------------------------------------------------------------------------




-------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) prohibits discrimination
 in all its programs and activities on the basis of race, color,
 national origin, gender, religion, age, disability, political beliefs,
 sexual orientation, and marital or family status. (Not all prohibited
 bases apply to all programs.) Persons with disabilities who require
 alternative means for communication of program information (Braille,
 large print, audiotape, etc.) should contact USDA's TARGET Center at
 (202) 720-2600 (voice and TDD).
    To file a complaint of discrimination, write USDA, Director, Office
 of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
 Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
 TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

                                 ______
                                 
Technical Assistance for Specialty Crops Program
    The Food, Conservation, and Energy Act of 2008 reauthorized the 
Technical Assistance for Specialty Crops (TASC) Program and provided 
mandatory Commodity Credit Corporation (CCC) resources of $4 million in 
FY 2008, $7 million in FY 2009, $8 million in FY 2010, and $9 million 
in FY 2011 and FY 2012.
    How the program benefits U.S. agriculture: The TASC program is 
designed to assist U.S. organizations by providing funding for projects 
that address sanitary, phytosanitary and related technical barriers 
that prohibit or threaten the export of U.S. specialty crops. For 
purposes of the TASC program, a ``specialty crop'' is defined as all 
cultivated plants and the products thereof produced in the United 
States except wheat, feed grains, oilseeds, cotton, rice, peanuts, 
sugar, and tobacco. Examples of activities these grants may cover 
include seminars and workshops, study tours, field surveys, pest and 
disease research, and pre-clearance programs.
    How the program works: TASC proposals are accepted from any U.S. 
organization, including, but not limited to, nonprofit trade 
associations, universities, agricultural cooperatives, private 
companies, U.S. Government agencies and state government agencies. The 
Foreign Agricultural Service (FAS), which administers the program, 
provides grant funds as direct assistance to U.S. organizations. 
Applicant contributions are not required, but are strongly encouraged.
    Each year, the U.S. Department of Agriculture announces an 
application period for participation in the TASC program, publishing it 
in the Federal Register. TASC applications undergo a competitive review 
process based on criteria specified in 7 CFR part 1487 and in the 
Federal Register announcement. Funds are awarded to applicants that 
demonstrate how their projects will overcome trade barriers resulting 
in market access retention and expansion for specialty crops. Awards 
are for a maximum of $500,000 per year and for projects of up to 5 
years. Proposals may target any eligible export market, including 
single countries or reasonable regional groupings of countries. 
Applicants may submit multiple proposals, but no TASC participant may 
have more than five projects underway at the same time. Funds may be 
requested as advance payments or on a reimbursement basis. Participants 
are required to maintain records and documents associated with the 
program agreement.
    Additional Information: To submit a TASC proposal or to find more 
about the program, contact the USDA-FAS Programs Operations Division, 
Grant Programs Branch; by phone: (202) 720-4327; e-mail: 
[email protected]; or the Internet at: http://www.fas.usda.gov/mos/
tasc/tasc.asp.
    Information on FAS programs, trade data and reports are available 
by accessing the FAS Home Page at: http://www.fas.usda.gov.

    Fiscal Year 2010 Technical Assistance for Specialty Crops Program
                               Allocations
------------------------------------------------------------------------
          Participant                   Project Title           Amount
------------------------------------------------------------------------
Almond Board of California       European Union Health and       $24,750
                                  Port Authorities Seminar
                                  and Tour
Bryant Christie, Inc.            Maximum Residue Level          $450,662
                                  Database Funding for
                                  Specialty Crops and
                                  Hawaiian Papayas
California Citrus Quality        California Navel Valencia      $124,562
 Council                          Exports to Korea Program,
                                  Korea Inspectors' Visit
California Department of Food    Minimizing Trade Barriers      $500,000
 and Agriculture                  through Field Surveys for
                                  the European Grapevine
                                  Moth
California Dried Plum Board      Retaining Export and Food    $1,458,772
                                  Security of U.S.
                                  Specialty Crops: Low-
                                  Emission Methyl Bromide
                                  Fumigation for Quarantine
                                  and Pre-Shipment Uses
California Fig Advisory Board    Encourage Japanese             $100,000
                                  Government To Allow
                                  Potassium Sorbate
                                  Treatment on High-
                                  Moisture Figs
California Grape and Tree Fruit  To Develop Efficacy Data        $54,388
 League                           Through a Pilot Systems
                                  Approach for Peach Twig
                                  Borer for U.S. Stone
                                  Fruit to Australia
California Pistachio Export      Improve Navel Orange Worm    $1,195,500
 Council                          Control in Pistachios To
                                  Overcome Sanitary and
                                  Phytosanitary Barriers in
                                  Major Export Markets
California Specialty Crops       Global Maximum Residue          $98,000
 Council                          Levels Engaging Specialty
                                  Crops in Priority
                                  Setting, Planning, and
                                  Compliance
California Strawberry            Spotted Wing Drosophila         $46,989
 Commission                       Impacts in Strawberry
                                  Exports
California Table Grape           Post-Harvest Control of         $90,000
 Commission                       Light Brown Apple Moth on
                                  Fresh Grapes
California Table Grape Export    Australian Phytosanitary       $150,000
 Association                      Preclearance Program
California Walnut Commission     Development of Technical        $66,836
                                  Brochures
Citrus Research Board of         Mortality of Asian Citrus      $216,303
 California                       Psyllid, Diaphorina
                                  Citri, in California
                                  Citrus During Packaging
                                  and Export to Australia
Florida Citrus Packers           Determination of Canker        $489,447
                                  Survival and Transmission
                                  via Canker-Blemished
                                  Fruit Relative to
                                  International Market
                                  Access
Florida Fruit and Vegetable      Management, Maintenance,       $389,464
 Association                      and Expansion of the U.S.-
                                  Canada Pesticide
                                  Harmonization Database
Georgia Peach Council/South      Export of Fresh, Systems-      $240,000
 Carolina Peach Council           Protected Georgia and
                                  South Carolina Peaches to
                                  Mexico
Indian River Citrus League       Best Post-Harvest Handling     $120,000
                                  Practices to Assure
                                  Canker-Free Fresh Citrus
                                  Fruit Exports
Northwest Horticultural Council  Changing India's                $66,060
                                  Phytosanitary Access
                                  Requirements for Pacific
                                  Northwest Cherries; OFM
                                  Monitoring and
                                  Verification at Origin
                                  Program for the Export of
                                  Peaches and Nectarines to
                                  Mexico; Study of
                                  Potential Health Effects
                                  Associated with the Use
                                  of Wax Coatings on
                                  Produce
Rutgers University, IR-4         Actions To Facilitate          $627,199
 Project                          Global Maximum Residue
                                  Levels for Priority Use
                                  on Specialty Crops
U.S. Apple Export Council        Apple Maggot and Other         $158,122
                                  Pests of Concern-
                                  Identification Treatment
                                  Methodologies and Data
                                  Collection
USDA, Agricultural Research      Classical Biological           $155,710
 Service                          Control of the Invasive
                                  White Peach Scale on
                                  Papaya in Hawaii;
                                  Phosphine Fumigation
                                  Treatment for Post-
                                  Harvest Inspect Control
                                  on Lettuce; Evaluating
                                  the Efficacy of Systems
                                  Approach Components for
                                  the Western Cherry Fruit
                                  Fly
USDA, Animal and Plant Health    Development of Irradiation     $175,000
 Inspection Service (APHIS)       Treatment for High-Impact
                                  Invasive Species and
                                  Evaluation of Commodity
                                  Tolerance to Irradiation
                                  Treatments
USDA, APHIS, Center for Plant    Development of                 $165,000
 Health Science and Technology    Infrastructure and
 (CPHST)                          Capacity for U.S. Export
                                  Specialty Crops
                                  Irradiation Treatments
USDA, APHIS, Plant Protection    A Prototype Electronic         $133,907
 and Quarantine and CPHST         Identification Resource
                                  To Support Agricultural
                                  Commodity Trade:
                                  California Table Grapes
Washington State Department of   Establishment of Japan          $38,000
 Agriculture                      ``Import Tolerance''
                                  Maximum Residue Level for
                                  Bifenezate in Red
                                  Raspberries
------------------------------------------------------------------------
    Total                                                     $7,334,671
------------------------------------------------------------------------




-------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) prohibits discrimination
 in all its programs and activities on the basis of race, color,
 national origin, gender, religion, age, disability, political beliefs,
 sexual orientation, and marital or family status. (Not all prohibited
 bases apply to all programs.) Persons with disabilities who require
 alternative means for communication of program information (Braille,
 large print, audiotape, etc.) should contact USDA's TARGET Center at
 (202) 720-2600 (voice and TDD).
    To file a complaint of discrimination, write USDA, Director, Office
 of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
 Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
 TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

                                 ______
                                 
Quality Samples Program
    The Quality Samples Program (QSP) helps U.S. agricultural trade 
organizations provide samples of their agricultural products to 
potential importers overseas.
    Focusing on industry and manufacturing, as opposed to end-use 
consumers, the QSP permits potential customers to discover U.S. 
quality. The QSP also allows manufacturers overseas to do test runs to 
assess how U.S. food and fiber products can best meet their production 
needs. In 2010, the U.S. Department of Agriculture (USDA) provided 
allocations totaling about $1.9 million to trade associations and state 
agricultural organizations under this program.
    How the program benefits U.S. agriculture: QSP stimulates interest 
and demand for U.S. agricultural products. Increased opportunities for 
agricultural exports ripple throughout the U.S. economy.
    How the program works: Each year, USDA announces an application 
period for participation in the QSP, publishing it in the Federal 
Register. Trade organizations and private firms can submit QSP 
proposals to USDA as part of the Unified Export Strategy (UES).
    QSP applications undergo a competitive review process based on 
criteria specified in the Federal Register announcement. Participants 
approved for QSP funding obtain commodity samples, export them and 
provide the importer the technical assistance necessary to use the 
sample properly. When a project is finished, USDA reimburses the 
participants for the costs of procuring and transporting the samples. 
The technical assistance component is a requirement of the program but 
is not reimbursable under the QSP.
    USDA's Commodity Credit Corporation (CCC) funds the program, which 
is authorized under the CCC Charter Act.
    What commodities are covered: USDA has approved QSP proposals to 
promote a wide variety of U.S. commodities, including wheat, citrus, 
cranberries, mohair, hides, rice, and soybeans. Many other commodities 
are eligible.
    Additional Information: To submit a QSP proposal or to learn more 
about the program, contact the USDA-FAS Program Operations Division, 
Grant Programs Branch, Phone: (202) 720-4327, Fax: (202) 720-9361; E-
mail: [email protected], Internet: http://www.fas.usda.gov/mos/
programs/QSP.asp.
    Information on FAS programs, trade data and reports are available 
by accessing the FAS Home Page at: http://www.fas.usda.gov.

          Fiscal Year 2010 Quality Samples Program Allocations
------------------------------------------------------------------------
          Participant                    Market(s)              Amount
------------------------------------------------------------------------
Alaska Seafood Marketing        China                            $28,000
 Institute
American Sheep Industry         China, Eastern Europe,          $365,000
 Association                     India, Mexico, Western
                                 Europe
American Soybean Association    Ghana, Palestine                 $47,000
California Agricultural Export  China                           $300,000
 Council
California Walnut Commission    China                            $25,000
Cranberry Marketing Committee   Austria, France, Germany,        $72,000
                                 Korea, Mexico,
                                 Netherlands, Spain,
                                 Switzerland
Ginseng Board of Wisconsin      China, Korea, Japan,            $170,000
                                 Taiwan,
Hop Growers of America          Brazil, China, Germany,           $5,000
                                 Russia
Mohair Council of America       China, India, South Africa,     $225,000
                                 South America, Southeast
                                 Asia, Western Europe
National Potato Promotion       Brazil, Central America,        $455,000
 Board                           China, Egypt, Indonesia,
                                 Japan, Malaysia, Mexico,
                                 Nicaragua, Philippines,
                                 South Korea, Sri Lanka,
                                 Sub-Saharan Africa,
                                 Thailand, Vietnam
U.S. Grains Council             Egypt, Saudi Arabia              $66,500
U.S. Livestock Genetics         Russia                           $64,100
 Export, Inc.
U.S. Wheat Associates           Morocco                          $66,740
------------------------------------------------------------------------
    Total                                                     $1,889,340
------------------------------------------------------------------------




-------------------------------------------------------------------------
    The U.S. Department of Agriculture (USDA) prohibits discrimination
 in all its programs and activities on the basis of race, color,
 national origin, gender, religion, age, disability, political beliefs,
 sexual orientation, and marital or family status. (Not all prohibited
 bases apply to all programs.) Persons with disabilities who require
 alternative means for communication of program information (Braille,
 large print, audiotape, etc.) should contact USDA's TARGET Center at
 (202) 720-2600 (voice and TDD).
    To file a complaint of discrimination, write USDA, Director, Office
 of Civil Rights, Room 326-W, Whitten Building, 14th and Independence
 Avenue, SW, Washington D.C. 20250-9410 or call (202) 720-5964 (voice or
 TDD). USDA is an equal opportunity provider and employer.
------------------------------------------------------------------------

 

  Thank you, Mr. Brewer. Let me just ask an initial question, and I will 
                                                                                                      let you use it as a springboard to answer it in whatever way you 

think is appropriate.  As you know, the blueprint for Fiscal Year 2012 spending has been unveiled this week, as a matter of fact, probably 
will come to the Floor next week. From a standpoint of expenditures and 
from a standpoint of what your agency realizes in terms of revenues to 
the government, I don't want to focus on the budget so much as I want 
to focus on what you do, what it costs, and what it brings in to our 
collective Federal entity here. 
    Mr. Brewer. Mr. Chairman, if I understand your question correctly, 
you want to know exactly what are the benefits of each of the programs?
    The Chairman. No. I guess I want to know in bigger terms whether 
what you are doing you believe ultimately produces revenue for us. I 
guess I am looking through to see what the real cost benefits are of 
your program. I think we know what the benefits are to our agricultural 
sector. Do you also see those benefits streaming through, so to speak, 
in an economic sense?
    Mr. Brewer. Yes, sir. Certainly. I think what I would start with is 
that the benefit of these programs certainly is American jobs. For 
example, the MAP Program. An Oregon softwood producer out on the West 
Coast participated in one of our programs, which was a trade mission 
that was funded by MAP Programs. Through the contacts that that 
manufacturer made, they were able to secure contracts of over $3 
million. That $3 million was able to keep a mill that was scheduled to 
be closed, open, saving 65 American jobs.
    Another example would be probably the tax base that is helped by 
the programs and the private sector initiatives that we have with our 
partners that brings in income to our farmers and ranchers, which, in 
turn, works into the economy and grows.
    The Chairman. One of the concerns that has been raised by the 
people analyzing the program is that the President's new initiative 
essentially takes programs that were already doing pretty effectively 
and gives them a new name and that as a matter of fact, there may be 
the potential for duplication in that area.
    What would you respond to those critics?
    Mr. Brewer. Well, sir, I will take your question in two parts 
because it sounds like there is an NEI component to it, the National 
Export Initiative, component to it and then just an overall question of 
duplication.
    Regarding duplication, we do not see that in our export promotion 
programs. Each program is designed to deal with a particular challenge 
to Americans trying to export their products to foreign markets. When 
you put them together, they also form a very comprehensive and 
effective tool to, again, meet challenges that may face U.S. exporters.
    For example, one thing that our cooperators, the U.S. Hay 
Association, is doing is they used our Quality Samples Program to 
introduce into the Chinese market U.S. hay. Building on that 
introduction of samples of our product, we were then able to move into 
using FMD Programs, Foreign Market Development Programs, to stay in 
that market and to build a market share and to gain market share for 
U.S. hay in the Chinese market. So they really compliment one another 
and build to be effective tools.
    The Chairman. My last question would be that we have heard, and I 
assume you have from the industry sector, if you will, about some of 
these proposed changes to MAP and FMD. Is it your intention and have 
you implemented some of those suggestions and ideas from industry 
participants to modify your original announcement and what you are 
trying to do?
    Mr. Brewer. Sir, the short answer to your question is, no, nothing 
has been implemented. What we want to do is: MAP and FMD are 
longstanding programs with a very strong participation by our 
cooperators. What we want to do--but we are always looking for ways to 
improve the programs, for ways to do things better. So what we wanted 
to do was we wanted to start a conversation about how can we improve 
MAP. We have had that conversation. It is an ongoing conversation with 
our stakeholders and our cooperators. We have also come up here on the 
Hill and briefed and gotten engaged in consultations with Congressional 
staff on this. So it is an ongoing conversation. Any possible changes 
or improvements to the program will not be implemented without 
consultation with our partners and with Congress.
    The Chairman. With that and my time having expired, I recognize the 
Ranking Member, the gentleman from California, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman.
    Mr. Brewer, as we are obviously looking at trying to get our 
nation's fiscal house in order and budget constraints and reducing our 
deficit, we know that that is going to require cutting back on a host 
of programs. So as we look at the reauthorization of the 2012 Farm 
Bill, which I would argue has actually cost less than was anticipated 
when we authorized it in 2008, and we should be mindful of that, that 
we look where we get the best bang for our buck, especially in the 
Title I Programs.
    The Market Access Program that I am familiar with, and that you 
deal with, has been effective, but it has also been criticized as a 
corporate welfare for large for-profit corporations like McDonald's, 
Mars, et cetera.
    What would be your response to that statement?
    Mr. Brewer. Congressman, thank you for your question. Sir, my short 
answer to that statement would be that it is simply incorrect. By 
statute large corporations are prohibited from participating in the MAP 
Program.
    Mr. Costa. Good. Let us underline that. By definition they are 
prohibited.
    Mr. Brewer. They are prohibited by statute to participate in this 
program, in the MAP Program. This program is directly targeted to 
nonprofit trade organizations, to agricultural cooperatives, to our 
nonprofit state regional trade groups, what we call our SRTGs. Those 
SRTGs, they represent not only multiple states but also hundreds of 
small and medium-size businesses.
    Mr. Costa. And it does exactly what it defines. It attempts to try 
to provide greater market access to markets that otherwise we have 
difficulty in penetrating.
    Mr. Brewer. That is correct, Congressman.
    Mr. Costa. Let me go on because there are some other areas, and my 
time is limited. The Technical Assistance for Specialty Crop Program, 
obviously, is big in California with over 300 specialty crops. But, 
other parts of the South, West, the Northeast, in Michigan, other 
places, the 2008 Farm Bill authorized funding for the Technical 
Assistance for Specialty Crops at $4 million for Fiscal Year 2008, 
increasing it incrementally up to $9 million in 2011 and 2012.
    How has this increased funding been allocated?
    Mr. Brewer. Sir, the TASC funds are being obligated now. We are 
getting applications in, and they are being obligated. If I can step 
back and just give a little sense of what TASC is because it hits on 
what you have touched on in your statement.
    Mr. Costa. Quickly because I have other questions.
    Mr. Brewer. I am sorry. The TASC funds are being obligated now to 
our applicants.
    Mr. Costa. Okay, and for which countries and for which commodities 
do you think this is most effective in breaking down the technical 
effort for issues with restrictions for animal restrictions or food 
restrictions? Give some examples.
    Mr. Brewer. Yes. We have had a number of successes with regard to 
TASC. Just a couple of examples are TASC funds have been used to 
develop a pre-clearance program for table grapes, helping us export 
into the Australian market. We have also used TASC funds or I should 
say our cooperator, the U.S. Potato Board, has used TASC funds to 
establish a U.S. Thailand seed potato protocol to address SPS and TBT, 
which stands for Technical Barriers to Trade, concerns. That led to the 
Thai market opening up for seed potatoes, and that market is valued 
between $3 and $5 million.
    Mr. Costa. Let me go finally, as my time is almost gone, the 
President in his State of the Union talked about streamlining 
government and focusing on the Executive Branch. Can you provide any 
recommendations that you folks are looking at within your area in which 
reorganization will take place under the Executive Branch effort, areas 
that involve foreign agricultural services with the U.S. trade 
agencies?
    Mr. Brewer. Well, sir, regarding trade agency consolidation, we 
certainly support the President's effort to find efficiencies in 
government, and USDA is engaged in that effort. Secretary Vilsack has 
met with OMB on this subject. My agency has participated in 
Administration discussions on consolidation as well.
    There are, however, unique challenges in trade of ag products that 
require technical expertise that is not normally housed in a trade 
agency. One thing that has really helped FAS succeed in our mission has 
been our long history of contact and connection with the ag community 
as well as the way we are able to work very collaboratively with other 
elements in USDA. I am referring to APHIS and FSIS.
    We want to make sure that is preserved in any future discussions.
    Mr. Costa. Well, Mr. Chairman, thank you. My time has expired, but 
I would also suggest that you take the input, if you are not, and I 
suspect you are, from the private sector as you look at this 
reorganization and greater efficiencies because I know they work hand 
in hand with you and as we try to gain greater access to foreign 
markets, and their suggestions on reorganization could be helpful.
    Mr. Brewer. Certainly are doing that.
    Mr. Costa. Yes, sir. Thank you.
    The Chairman. The chair would recognize the gentlelady from 
Missouri, Congresswoman Hartzler.
    Mrs. Hartzler. Thank you, Mr. Chairman. Thank you, Mr. Brewer.
    I just wanted to ask some questions about the foreign service 
officers. What is the unique role of the foreign service officers 
stationed in like U.S. embassies?
    Mr. Brewer. Yes, Congresswoman, thank you for your question.
    Our foreign service officers, our ag attaches stationed around the 
world are really our first responders when it comes to trade 
disruptions. They are on the ground, they are providing us with 
information that is just extremely valuable for us back here in 
Washington.
    A couple of examples that would show the value that they bring in 
both Taiwan and South Korea. There was cherry deliveries that were held 
up over pesticide residue concerns by the Koreans and the Taiwanese. 
Those deliveries were worth $7 million. Our folks were able to get on 
the ground to work with their counterparts in those governments and get 
those things released, get those cherries released, that product 
released before they perished. That was a highly-perishable commodity, 
and by us being on the ground, being there, having the connections that 
we had we were able to get those released.
    So that is just one example of how being that first responder is 
very valuable.
    Mrs. Hartzler. Sure. How many countries are they in right now? How 
many embassies have foreign----
    Mr. Brewer. We have about 99 offices around the world, but we 
cover, again, as I said in my statement, about 156 different countries.
    Mrs. Hartzler. Great. How would they help overcome trade barriers 
that are out there?
    Mr. Brewer. Well, again, it would be their presence on the ground, 
their contacts with their counterparts within the embassies, their 
ability to help us monitor and enforce agreements that we have or have 
made, be it MOUs right up to various other trade agreements. So just 
being there on the ground, knowledgeable of the culture and the country 
that they are working in, as well as knowledgeable about the priorities 
here in the United States and what we have in our agricultural 
strategy. They are also on the ground to work closely with our 
partners, the cooperators have, many of them have foreign offices so 
there is that contact there. So just that communication, collaboration, 
access is something that really helps us.
    Mrs. Hartzler. There is a problem as you probably are aware of 
counterfeiting of U.S. brands, and I just wondered what is FAS doing to 
coordinate with the EMP and participants to protect U.S. brands and 
prevent counterfeiting.
    Mr. Brewer. Congresswoman, I don't have a very good answer for you 
for that specific issue, but I will ask my staff. I can have my staff 
get back to you to talk specifically about counterfeiting.
    Mrs. Hartzler. Okay, and the last part of my question, I guess, 
just real practical. I have just been here 3 months, a farm background, 
and my husband and I farmed, been involved with that. But say there is 
a company in the 4th district of Missouri that wants to promote their 
product, an ag-related product overseas, there may be a small business, 
they have an idea. They want to export it.
    What services could your department provide that would be helpful 
to them that I could connect them with?
    Mr. Brewer. Yes, ma'am. We have a host of services that could 
certainly help anyone interested in exporting overseas. In fact, that 
is one of the major goals of the National Export Initiative to increase 
the participation of that. I think first thing probably would be to 
visit our website. We certainly have contact names there, Office of 
Trade Programs can certainly be of great help. Again, through the NEI 
process we are working and communicating, collaborating with the 
Commerce Department, with the Small Business Administration, we are 
building a system of where if someone goes to those entities there is a 
system of getting them to us, and vice versa, if there is something 
that is more appropriate for those agencies, we can get it to them.
    So there is really a system being built up, but I would start with 
our website would be a place to go.
    Mrs. Hartzler. Very good. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. The chair would recognize the gentleman from North 
Carolina, Mr. Kissell.
    Mr. Kissell. Thank you, Mr. Chairman, and thank you, Mr. Brewer, 
for being with us today. You had talked about in your opening remarks 
the significant increases in exports in ag products. Very briefly, 
where would you attribute the export coming from any particular 
segments of agriculture, and what forces overseas have led to this, and 
just kind of how did we get to those increases?
    Mr. Brewer. Congressman, our top markets are China, Canada, Mexico, 
Japan, and the EU. So a lot of the interest from those countries are 
really driving a lot of the exports we have. Our top markets, I would 
say our top commodities are soybeans, cotton, wheat, and I am not 
putting them in any particular order, but fruits and vegetables, et 
cetera. There is a great deal of product going to China, and that is 
driving a lot of our successful numbers, as well as our success through 
these programs of knocking down barriers.
    I mentioned the cherry issue in South Korea and Taiwan. We also 
have been working with the Chinese. They had some concerns about the 
quality and safety of our soybeans. We were able to go through our FMD 
Program, we were able to work an MOU with them that addressed their 
concerns and kept that flow of soybeans going to China.
    I think the combination of just a greater demand from our major 
markets as well as the efficient way that we are administering these 
programs to knock down trade barriers to open up those markets is 
really the combination that is leading us to those high numbers.
    Mr. Kissell. Is there any concern as we see rising food prices and 
high food prices, is there any concern that we are creating a demand 
that will drive food prices up, and then do we have the supply to be 
able to fulfill what we are trying to do overseas? And we are glad to 
have the good income from our farmers, but, this supply and demand 
thing keeps coming back, too. Is there any concern that we will be 
generating demands that will outstrip supply and therefore create 
problems on the pricing side?
    Mr. Brewer. Well, sir, in my agency one of the program areas that 
we have is our Office of Global Analysis. They do a lot of market 
analysis, a lot of crop production analysis, looking at those issues. 
We don't believe that our success in exporting our products is leading 
to any kind of price volatility of any kind, but we are working closely 
with other elements with USDA. I should say we are following the work 
of other elements within USDA, particularly the Economic Research 
Service and the World Board that are following these kinds of issues 
and keeping us abreast of whether something is going on that we are not 
aware of.
    But at this point we don't believe that our exports are causing any 
problems with that.
    Mr. Kissell. And in the area of government efficiencies, I know in 
talking with some folks in Commerce, they also are stressing exports as 
many people are. Do you find opportunity to work with other departments 
and programs they might have, and do you know what programs we might 
have that there might be duplications of?
    Mr. Brewer. Sir, through the National Export Initiative as I 
mentioned a couple of times before, we are really working with, the 
Administration has really reinvigorated the President's Export Council, 
the Export Cabinet, a lot of communication, a lot of collaboration 
going on to make sure that the various parts of the Federal Government 
involved in this area are working together, are communicating, and 
really complimenting one another's missions and goals.
    That has been extremely helpful in not only helping us target 
particular markets to get in those markets, opening them up, and get 
U.S. products in there, but also to streamline and become more 
effective as a government, as a Federal Government in this area of 
trade and exports.
    I think we are doing much more complimenting of our services to 
move forward than duplication.
    Mr. Kissell. Thank you, sir. Thank you, Mr. Chairman.
    The Chairman. Thank you, and the chair would recognize the 
gentleman from Georgia, Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman. Mr. Brewer, thank you so much 
for joining us, and some of my questions revolve around what Mr. 
Kissell had to ask, but just let me go back to the statement. The 
President's National Export Initiative goal is to double all U.S. 
exports within 5 years, and I certainly think that that is a good goal 
for our country and hope that we are able to reach that, and I know 
that you and this Committee will be a big part of that if we are able 
to reach it.
    My district in Georgia, the 8th district, has a wide variety of 
crops. We are always looking for opportunities to improve the markets 
and expand our ability to trade internationally, and I know you talked 
about the current countries with Mr. Kissell's question and current 
crops.
    My question is future countries and future crops. What future 
countries do you see the U.S. increasing trade with over the next 
couple of years?
    Mr. Brewer. Congressman, that is a very good question. Let me step 
back and give you one of the activities that we do within the agency to 
help us, again, streamline and stay efficient and stay at a very 
effective working level is something we call the global review. We 
look, annually, at our footprint around the world, where we have 
offices, and adjust as necessary, just make sure that we are where the 
best places are for us to be in order to promote agricultural exports.
    As I said, that is an annual review. I would say that some of the 
places that have been identified where we provided the budget is there 
to do so, but we are constantly adjusting. Where we see ourselves 
being, we just recently have opened offices in Africa, Ethiopia, we 
think Angola is a place that has growth potential, certainly doing more 
activity in the southern region of Africa, south Africa, Kenya. In Asia 
we are looking at more offices in China because, again, they are our 
largest competitors to expanding there. We are constantly looking 
through that global review and through the work of our attaches on the 
ground trying to find where is that next country. But right now I would 
say Angola and China, et cetera, would probably be it.
    Mr. Scott. I mean, again, getting back to the goal of doubling our 
exports within 5 years, the Columbia Free Trade Agreement, the Panama 
Free Trade Agreement, the South Korea Free Trade Agreement, I am 
someone who personally believes all of those things would help us 
achieve what the President says the goal is, and yet he has not done 
anything with those agreements yet.
    So what can we do together to help get these trade agreements 
passed so that we can start working towards that path of doubling those 
exports?
    Mr. Brewer. Congressman, let me start off by saying just flat out, 
the three FTAs are good for agriculture. All three of them are very 
good for agriculture. The trade agreements knock down tariffs to U.S. 
products that help us get in those markets quickly. For example, in 
South Korea with the passage of that agreement that will give us 
greater access to Korea's $1 trillion market economy and their 50 
million consumers, or almost 50 million consumers.
    The International Trade Commission, the ITC, believes that once it 
is fully implemented it will add $2 to $4 billion to U.S. exports.
    So it is a very solid commitment. The Korea Agreement is ready to 
go. I am sure it will be forwarded to Congress soon. We have made 
progress on the Columbia Agreement. There is a path forward for that, 
so I am fully confident that will come up, so they are on their way.
    Mr. Scott. I apologize for interrupting you, but I am about to run 
out of time. I want to express, and so I apologize for the 
interruption, but I want to express one concern I have, and certainly 
we want to get rid of duplicative agencies and things along those 
lines. But, I do want to make sure that when it comes to agriculture 
and agriculture trade, it is handled through the USDA and not any other 
agency, and Mr. Chairman, with that statement, again, Mr. Brewer, I 
apologize for the interruption of your answer, but I am out of time.
    Mr. Brewer. Yes, sir.
    Mr. Scott. Thank you.
    Mr. Brewer. No problem.
    The Chairman. Thank you, Mr. Scott. The chair recognizes the 
gentleman from Texas, Mr. Cuellar.
    Mr. Cuellar. Thank you very much, Mr. Chairman, for holding this 
meeting.
    Mr. Brewer, can you explain what impact the dispute that we have 
had with the Republic of Mexico with the trucking issue has had? As you 
know, the trucking issue was part of NAFTA, and the U.S. didn't keep up 
its part of its deal. The Mexicans then came back and added tariffs to 
hit the ag folks. I certainly want to thank President Obama, President 
Calderon and Secretary LaHood for making this--hopefully at least to 
have an agreement and concept, but could you tell us what sort of 
impact that had, I mean, on our exports? We are exporting to Mexico. I 
know there is a lot of ag products that we export, and what sort of 
impact does it have on us because of the tariffs, and hopefully if the 
agreement goes through, they will eliminate the tariffs and we go back 
to the way it was.
    Mr. Brewer. Congressman, thank you. Regarding the trucking issue, 
it certainly did have an impact on agricultural exports. As you know, 
in response to the refusal of the Mexican trucks coming in, they had a 
series of tariffs on a variety of products. A number of them were 
agricultural products. It did reduce the amount of product that we had 
going in there. We did lose some market share, but as you said in your 
comments, we are very excited and happy about the agreement, and it is 
moving forward.
    Secretary LaHood and the Transportation Department is certainly 
point on that along with the State Department, and they appear to be 
moving quickly to try and resolve this issue and with its resolution 
that will allow us to recover what we had due to the problems caused by 
the increase in tariffs on agriculture.
    Mr. Cuellar. All right. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. Thank you. The gentleman from Pennsylvania, Mr. 
Thompson.
    Mr. Thompson. Mr. Brewer, thank you so much for being here, for 
your testimony, and your service. As you mentioned before and it has 
been mentioned a number of times about the President's National Export 
Initiative goal of doubling U.S. exports within the next 5 years, my 
first question is in terms of agriculture, looking at agriculture, is 
that within reach for us within the next 5 years? Is it going to be 
relying basically on what we have been doing, or are there new things, 
new initiatives that we are going to have to roll out, either through 
Congress or certainly administratively to achieve that goal?
    Mr. Brewer. Congressman, just to step back quickly to really make 
sure we are on the point of the National Export Initiative, it really 
is national. It is across the Federal Government. It is not just ag but 
all sectors to increase that, and that doubling is for everybody. So we 
certainly play a role in that.
    Mr. Thompson. Oh, I understand that, but I joined the Agriculture 
Committee for farmers, so I am here to talk about ag.
    Mr. Brewer. Exactly right. We believe that it is an achievable 
goal. We certainly at USDA and within FAS through these export 
promotion programs as well as the other tools available to us, 
certainly are doing all we can do on our part in order to achieve that 
goal. Within the President's 2012 budget there is a request for $20 
million to assist us in our NEI efforts. What we would like to do with 
that money is monitoring and enforcement of international trade 
agreements, making sure that our partners do what they have agreed to 
do with regard to market access, et cetera. We believe that those extra 
funds will go a long way in helping us do that monitoring and 
enforcement. Other goals of those funds are to increase the trade 
missions that we have, to streamline our certification process, making 
it more electronic, and just to speed up the process of where our 
farmers and ranchers can export, and certainly to increase the 
assistance that we provide to help them get in there.
    Again, what we are looking at is really to help our small and 
medium-sized businesses to get into the export business, get into those 
foreign markets. If they are in one market, get them into two. Just 
really pushing that goal of being an exporter, and those NEI funds will 
help us achieve that goal.
    Mr. Thompson. All right. When you are involved in those discussions 
in that work, how sensitive is the issue of cost, production costs, 
which is obviously the cost that our agriculture community experiences, 
the cost that is only placed on those commodities to be sold in trade.
    Do you find that that is sensitive? How sensitive is that? How 
often does that issue come up?
    Mr. Brewer. Congressman, let me make sure I understand your 
question. You are talking about the cost for the farmer and rancher to 
produce what he is----
    Mr. Thompson. Which ultimately results in the cost, the price 
placed for sale of that commodity, and do you find situations where we 
are just not competitive in terms of the cost for commodities that we 
are trying to place in trade to other countries?
    Mr. Brewer. For what we are doing, sir, where we focus on is really 
the exporting of those commodities and how can we assist in getting 
that commodity out into a foreign market. We are hopeful that we get it 
at the right price, we give these opportunities to sell more, that it 
will assist in allowing the farmer and the rancher to be able to afford 
what inputs he needs in order to produce that.
    So we are really focused on assisting the farmer and rancher in the 
way of giving them access to new consumers and new markets in order to 
sell his product, in order to thrive in his business.
    Mr. Thompson. Okay. Thank you, Mr. Brewer. Thank you, Chairman.
    The Chairman. The chair will recognize the gentlelady from Alabama, 
Ms. Sewell.
    Ms. Sewell. Thank you, Mr. Chairman.
    Mr. Brewer, on February 18 the USDA released recommendations for 
implementation of a law requiring tough new inspection and regulation 
of catfish all across America. The proposed rule transfers the 
inspection and regulation of catfish from the FDA to the USDA.
    My particular district is the second largest American producer of 
catfish in Alabama, where I reside, and the proposed regulation is a 
step in the right direction. I know that we are currently in a 120 day 
comment period and just really wanted to know what kind of comments, to 
the best of your knowledge, that we have been receiving and where do 
you see that direction of that regulation going?
    Mr. Brewer. Congresswoman, thank you. As you are well aware of, 
FSIS is really the agency of jurisdiction over that, so I really don't 
have a lot of comment on that. As you rightly say, we are in the public 
comment period. That period ends late June, around June 24, and all 
aspects of the rule are being looked at and commented on during this 
period, right up to and including the definition of catfish. So that 
process is ongoing.
    I will take this opportunity, though, to let you know that the 
Catfish Institute is a cooperator, is participating in our MAP Program, 
and they have been using our export promotion programs to market 
American catfish into Canada, and they are having some success in that. 
So I want to bring that in and just let you know that on that end that 
we are having some progress there.
    But FSIS is really the lead on the rule.
    Ms. Sewell. Right. Do you foresee that the regulation once the 
comment period is over would come out more immediately, or where do you 
see your agency in assisting the catfish industry generally?
    Mr. Brewer. I cannot comment on the impact of the rule or any of 
that, I wouldn't have that, but we certainly are prepared to use our 
export promotion programs that we administer to assist getting catfish 
into foreign markets, wherever it might be a popular place for it.
    So we stand ready to handle that on that trade aspect to really 
help in any way we can to get those products into foreign markets.
    Ms. Sewell. Great. Thank you, Mr. Brewer.
    Mr. Brewer. Yes.
    The Chairman. The gentleman from Indiana, Mr. Stutzman.
    Mr. Stutzman. Thank you, Mr. Chairman, and thank you, Mr. Brewer, 
for being here.
    Could you comment a little bit about China. They continue buying 
corn from us. Is that going to continue to grow? I know they are 
obviously a growing economy, and how does that affect our markets here?
    And then also if you could comment a little bit about how ethanol 
plays into our production as far as competitiveness with exports to 
China and other countries.
    Mr. Brewer. With regard to your question about China, as I 
mentioned earlier, China is certainly our number one market for our 
products. It is a market that we are having some success in. Clearly it 
is our number one market, but it is one that requires constant 
monitoring, constant activity, and to make sure that market stays open.
    Again, it goes back to the value of our foreign service, of our ag 
attaches being on the ground, opening up opportunities for U.S. 
products to be sold. I think one example of the success we are having 
there is that recently a supermarket chain in China has been for the 
second year in a row and we hope for a third year is having a focus on, 
I guess, an American food show. They are highlighting and really 
bringing attention to American products to their customers, and they 
have been able to introduce over 60 new products and during that show 
we have had thousands of dollars in sales.
    So not only is it bringing income, it is really starting to build 
the American brand among the Chinese consumer. So we are having a lot 
of success there, but as I said, constant vigilance is what we need.
    Your question of ethanol, I am sorry, you wanted to know how is it 
helping or----
    Mr. Stutzman. Yes. How is that playing with your ability to sell 
our commodities to foreign markets and the competition with ethanol 
domestically? Commodity prices are higher now than they have been in a 
long, long time, maybe ever. Are you finding it difficult to have the 
ability to have resources or the commodities here to go to China and 
other countries and say we have the products. Is ethanol biting into 
that at all?
    Mr. Brewer. Congressman, I am not aware of that. As I mentioned to 
Congressman Kissell, we are enjoying record sales abroad, sales of our 
commodities. We are certainly monitoring the market, but we are not 
finding any kinds of shortages of access to that, but I don't have that 
kind of information at my fingertips, but I would certainly be happy to 
take that back and find----
    Mr. Stutzman. Sure. One other question, and you kind of alluded to 
it, is could you describe the background and the training that USDA 
requires for your FSOs and their effectiveness in promoting U.S. 
exports? Are we bringing buyers to the United States and giving them 
reasons to buy from us? What is that relationship, and how does that 
relationship work?
    Mr. Brewer. Yes, sir. We are certainly through our MAP Program, we 
are doing a number of trade missions; both having American companies 
and sellers going over to that country to describe their products. We 
are also having trade missions coming here.
    In fact, one of them that is probably of interest to Mr. Scott, 
Congressman Scott, is a store we have been doing with one of our 
participants, the American Peanut Council. The Peanut Council in 2007, 
used MAP funds to go over to Japan, and while they were there to meet 
with the group of Japanese importers and other buyers about peanuts. In 
part through that, sales went up, increased by 75 percent of American 
peanuts into Japan. In 2010, we did the reverse. MAP funds were used to 
bring Japanese buyers to Georgia to look at the product and look at how 
peanuts are grown, and that effort led to now where we have captured 
about 35 percent of the Japanese market in peanuts.
    So that is just one example of how, yes, we are going over there, 
and we are bringing folks here in our efforts to increase U.S. exports.
    Mr. Stutzman. Okay. Thank you. I yield back.
    The Chairman. Thank you. That concludes the first set of questions. 
If any of my colleagues have anymore questions, I would be more than 
happy to allow it, but I think that is probably an appropriate place to 
thank Administrator Mr. Brewer for your testimony, your responses to 
our questions, and your service to our agricultural sector and our 
country. Thank you very much.
    Mr. Brewer. Thank you very much.
    The Chairman. With the understanding that we could have votes in 
the relatively near future, I think we ought to proceed with the next 
panel, second panel, with their understanding that we could be 
interrupted during the course of either your testimony or your 
responses to our questions. I hope that you will be able to be patient 
with us in meeting our other obligations.
    Gentlemen, ladies, I want to introduce four of the witnesses and 
then I would like to defer to the Ranking Member for a specific 
introduction of a fifth member with whom he has, through his state and 
otherwise, a personal relationship and communication.
    I just want to introduce each of you and then go back to the 
beginning. Our first witness is Mr. Michael Wootton, Senior Vice 
President Corporate Relations, Sunkist Growers, on behalf of the 
National Council of Farmer Cooperatives and the Coalition to Promote 
U.S. Agricultural Exports, Mr. Stephen Censky, Chief Executive Officer, 
American Soybean Association, St. Louis, Missouri, Mr. Thad Lively, 
Senior Vice President, Trade Access, U.S. Meat Export Federation, 
Denver, Colorado, Mr. Tim Hamilton, Executive Director of the Food 
Export Association of the Midwest USA.
    And the Ranking Member would like to, and I would appreciate his 
introducing the fifth member of the panel.
    Mr. Costa. Thank you, Mr. Chairman. Mr. Nikolich is from Reedley, 
California. He has been with Gerawan Farms for 25 years. He started his 
career as an agronomist and pest management specialist, and he has 
worked his way up as Vice President of Technical Operations for Gerawan 
Farms, a family farming operation that has been in the Valley for many, 
many years, and who we are very proud of.
    Thank you.
    The Chairman. Thank you, and we appreciate all of you being here.
    I would recognize first the gentleman from the Sunkist Growers, Mr. 
Wootton. We all have your written statements and since we are kind of 
at a limitation here, it would probably be a good idea if each of you 
kind of summarize that and let us get onto our questions. But proceed 
as you wish.
    Mr. Wootton.

              STATEMENT OF MICHAEL J. WOOTTON, SENIOR VICE
PRESIDENT CORPORATE RELATIONS, SUNKIST GROWERS; CHAIRMAN, COALITION TO 
   PROMOTE U.S. AGRICULTURAL EXPORTS, SHERMAN OAKS, CA; ON BEHALF OF 
                NATIONAL COUNCIL OF FARMER COOPERATIVES

    Mr. Wootton. Thank you, Mr. Chairman. I appreciate the opportunity 
to be here today and thank Mr. Costa and the Members of the 
Subcommittee for giving us this opportunity.
    Sunkist is a 118 year old agricultural marketing cooperative owned 
by and governed by about 4,000 citrus growers in California and 
Arizona, and the average size of their production acreage is about 40 
acres. So they are truly small family farmers.
    Sunkist markets the citrus that they produce both in the domestic 
and international marketplace under the Sunkist brand. Farmer 
cooperatives across the country offer farmers an opportunity to market 
their products and compete in a global marketplace. Cooperatives 
through collective resources enable individual farmers who do not have 
the resources or the production volume individually to access and 
successfully compete in foreign markets with their U.S.-grown products.
    The farm revenues and economic wellbeing of the agriculture sector 
depend heavily on exports, which accounts for 25 percent of U.S. farm 
cash receipts, provide jobs for over one million Americans, and make a 
positive contribution to our nation's overall trade balance. Market 
Access Program is an essential part of that effort.
    As important as agriculture is to our balance of trade, unfair 
trade competition from foreign sources remains a growing problem in 
foreign outlets and in our domestic market. The inroads made by Spanish 
Clementine Mandarins in our domestic market are illustrative. Spanish 
producers assisted by EU Trade Promotion Initiatives and other forms of 
subsidy assistance began shipping large volumes of mandarins into the 
U.S. marketplace several years ago.
    The scope and cost of their marketing activities has been notable. 
Spanish exporters, which are producing citrus in a high cost, developed 
nation, and incurring significant transport costs to move their 
products thousands of miles to U.S. grocery stores, have been able to 
deliver to U.S. consumers a product with extremely expensive packaging 
and at competitive price against California citrus produced near Mr. 
Costa's district.
    These Spanish producers are not so competitive that they can defy 
the rules and laws of economics. Their main advantage is very clear. 
They are receiving extensive EU and national support to sell and 
promote their product abroad. According to the EU's most recent WTO 
notification, the EU is providing over $1.4 billion in marketing and 
advertising activities to support its agricultural sector. Just last 
month the European Parliament passed a resolution urging an increased 
commitment and resources to this end. The EU and its 27 nation-members 
are clearly persuaded that government-supported export promotion is 
essential to growing exports in the agricultural arena.
    The same thing can be said of China, and FAS has a report dated 
last November that outlines the intervention and heavy involvement of 
the Chinese Government in subsidizing its agricultural sectors.
    Now, American agricultural producers are confident that their 
ability to compete around the world based on quality, and in our case 
at Sunkist an asset of brand identity, but we cannot compete against 
foreign farmers standing on the shoulders of their national treasuries.
    Our export programs have long recognized this reality. The 
predecessor to the MAP Program, the Targeted Export Assistance Program 
was a bipartisan program signed into law in 1985, by President Ronald 
Reagan and expressly designed to counter unfair foreign activities. 
Unfair foreign trading practices have grown over time, and MAP has been 
the only means for many in American agriculture to counter the harm. 
The program is efficiently administered on a cost-share basis with 
farmers and other participants required to contribute up to 100 percent 
match of their own resources, and the Administrator outlined the 
eligibility requirements. By any measure MAP and other USDA trade 
promotion programs have been tremendously successful and cost effective 
in maintaining expanding U.S. agricultural exports, creating American 
jobs, and strengthening farm income.
    And this is documented also in a USDA-commissioned audit by IHS 
Global Insight, which was commenced during the Bush Administration, 
completed during the Obama Administration, and shows that investment 
providing a 35 to 1 return.
    The report also showed that from 2002 to 2009, export gains 
associated with programs increased average annual farm receipts by $4.4 
billion, net cash farm income by $1\1/2\ billion. It further confirmed 
that due to the higher prices from increased demand abroad, U.S. 
domestic farm support payments were reduced by roughly $54 million 
annually, thus reducing the net cost of these U.S. programs.
    The examples of Sunkist MAP success stories, my written testimony, 
and others like them from a host of other cooperators are tangible 
benefits of sound public policy. They have been made possible because 
Congress in every Administration since Ronald Reagan have recognized 
that global agriculture is heavily impacted by foreign governments.
    American producers cannot succeed without a reasonable partnership 
with our government, and to give up this supportive partnership is to 
cede the playing field to foreign producers and the governments that 
stand behind them.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Wootton follows:]

    Prepared Statement of Michael J. Wootton, Senior Vice President
 Corporate Relations, Sunkist Growers; Chairman, Coalition to Promote 
  U.S. Agricultural Exports, Sherman Oaks, CA; on Behalf of National 
                     Council of Farmer Cooperatives
    Good morning, Mr. Chairman, Ranking Member Costa, and Members of 
the Subcommittee. My name is Michael Wootton. I am Senior Vice 
President of Sunkist Growers, and am pleased also to be testifying as 
Chairman of the Coalition to Promote U.S. Agricultural Exports and on 
behalf of the National Council of Farmer Cooperatives.
    On behalf of Sunkist's grower-members, and the more than two 
million farmers and ranchers who belong to farmer cooperatives, I 
appreciate this opportunity to submit testimony regarding our vital 
export promotion programs, and respectfully request that this statement 
be made part of the official hearing record.
    Sunkist Growers is a 118 year old agricultural marketing 
cooperative owned and governed by 4,000 citrus growers in California 
and Arizona. The average size of their family farms is approximately 
forty acres. Their Sunkist cooperative markets their citrus both in the 
U.S. market and internationally under the Sunkist brand.
    Farmer cooperatives across the country offer their farmers an 
opportunity to market their products and compete in a global 
marketplace. Cooperatives, through collective resources, enable 
individual farmers, who do not have the resources or production volume 
individually to access and successfully compete in foreign markets with 
their U.S.-grown products. Earnings from these overseas sales then flow 
back to the farmer-owners in the form of increased patronage dividends 
and help lower our U.S. trade deficit.
    The Coalition to Promote U.S. Agricultural Exports is a coalition 
of over 150 organizations, representing U.S. farmers and ranchers, 
fishermen and forest product producers, cooperatives, small businesses, 
regional trade organizations, and the State Departments of Agriculture 
(see attached). The Coalition believes the United States must continue 
policies and programs that enable American agriculture to compete 
effectively in a global marketplace still dominated by unfair foreign 
subsidies and access restrictions.
    The farm revenues and economic well-being of our agricultural 
sector depend heavily on exports, which account for over 25% of U.S. 
farm cash receipts, provide jobs for over one million Americans, and 
make a positive contribution to our nation's overall trade balance. The 
support provided by USDA's Market Access Program (MAP) is essential to 
our export health.
    As important as agriculture is to our balance of trade, unfair 
foreign competition remains a growing problem in foreign outlets and 
here at home. In the fruit and vegetable sector, for example, which 
includes a large number of MAP cooperators, foreign competitors have 
made extraordinary in-roads over the past decade. As a result of open 
U.S. trade policies, half of all fresh fruits and vegetables consumed 
in the U.S. are now of foreign origin.
    The in-roads made by Spanish Clementine Mandarins in our domestic 
market are illustrative. Spanish producers, assisted by EU trade 
promotion initiatives and other forms of subsidy assistance, began 
shipping large volumes of Mandarins into the U.S. market in recent 
years. Their in-store promotions and attractive packaging enabled them 
to seize a high-value share of the U.S. market and reduce returns for 
American producers.
    The scope and cost of their marketing activities has been alarming. 
Spanish exporters, which are producing citrus in a high-cost, developed 
nation and incurring significant transport costs to move their product 
thousands of miles into U.S. grocery stores, have been able to deliver 
to U.S. consumers a product with extremely expensive packaging at a 
competitive price against California citrus produced near Mr. Costa's 
district.
    These Spanish producers are not so competitive that they can defy 
the laws of economics. Their main advantage is clear: they are 
receiving extensive EU and national support to sell and promote their 
product abroad. According to the EU's most recent WTO notification, the 
EU is providing over $1.4 billion in marketing and advertising 
activities to support its agricultural sector. Just last month, the EU 
Parliament passed a resolution urging the EU to commit even greater 
resources to promote agricultural exports. The EU and its 27 nations 
are clearly persuaded that government-supported export promotion is 
essential to growing exports in the agricultural arena.
    Other foreign competitors are funding large promotional activities 
as well. USDA's Foreign Agricultural Service (FAS) issued a report late 
last year on China's programs in this area. That report states that in 
China, ``industry associations, most with government support, are 
active in most areas, and their presence is often critical to 
success.'' The report observes that in cases of runaway export success 
stories out of China, the critical factor is usually a strong, 
government-supported program.
    American agricultural producers, including our 4,000 growers, are 
confident of their ability to compete around the world based on quality 
and, in our case, the asset of brand identity. But we cannot compete 
against foreign farmers standing on the broad shoulders of their 
national treasury.
    Our export programs have long recognized this reality. The 
predecessor of the Market Access Program, the Targeted Export 
Assistance (TEA) Program, was a bipartisan program signed into law in 
1985 by President Ronald Reagan and expressly designed to counter 
unfair foreign activities. As unfair foreign trading practices have 
grown over time, MAP has been the only means for many in American 
agriculture to counteract the harm.
    As a so-called ``green box program,'' MAP is among the few tools 
specifically allowed under WTO rules to help American farmers and 
exporters remain competitive in a global marketplace still dominated by 
unfair foreign competition. Though MAP's authorization has been as high 
as $325 million annually over the long life of this program, its 
current funding level of $200 million annually was authorized nearly 10 
years ago under the 2002 Farm Bill and saw no increase under the 
current bill. The program is efficiently administered on a cost-share 
basis, with farmers and other participants required to contribute up to 
100 percent match of their own resources. Those participants can only 
include small businesses, nonprofit U.S. agricultural trade 
associations, nonprofit U.S. agricultural cooperatives and nonprofit 
state-regional trade groups.
    By any measure, MAP and other USDA trade promotion programs have 
been tremendously successful and cost-effective in maintaining and 
expanding U.S. agricultural exports, creating American jobs, and 
strengthening farm income. A recent independent USDA-commissioned audit 
of MAP and other USDA trade programs prepared by IHS Global Insight, 
Inc. (the world's largest economic analysis and forecasting firm) 
confirmed that MAP uses government funds to supplement, not replace, 
industry funds. According to the report, the increase in market 
development spending by government and industry from 2002-2009 enlarged 
U.S. market share and increased the annual value of U.S. agricultural 
exports by $6.1 billion. This equates to $35 in agricultural export 
gains for every additional $1 expended, a 35 to 1 return on investment.
    The report also showed that from 2002-2009, export gains associated 
with the programs increased average annual farm cash receipts by $4.4 
billion and net cash farm income by $1.5 billion. It further confirmed 
that, due to higher prices from increased demand abroad, U.S. domestic 
farm support payments were reduced by roughly $54 million annually, 
thus reducing the net cost of these U.S. programs.
    As noted, because, non-trade distorting market promotions are 
permitted under WTO rules, and are not expected to be subject to 
disciplines under any final Doha agreement, market promotion is 
increasingly seen as a centerpiece of a winning agricultural strategy 
in developed nations and developing ones alike. A great many competitor 
countries have announced ambitious trade goals and are shaping export 
strategies based on strong government promotion programs. European 
countries are expanding their promotional activities in Asia, Latin 
America, and Eastern Europe. Canada, Australia, New Zealand, and Brazil 
have budgeted significant investments in export promotion expenditures 
worldwide in recent years. And, even as market promotion programs 
expand into global markets, a significant portion of foreign market 
promotion money will continue to be carried out here in the United 
States at our local supermarkets.
    As an approved USDA Cooperator organization, Sunkist Growers has 
seen first-hand how MAP can make a large difference in counteracting 
the effects of this pervasive foreign assistance. With matching monies, 
our MAP-funded activities increased lemon sales in Japan by 13.4% over 
the life of the campaign, increased lemon sales in China and Hong Kong 
in 2009 by 195% compared to 2008, and increased orange sales in 
Singapore by 127% over the life of the campaign.
    These examples, and others like them from a host of other 
cooperators, are the tangible benefits of sound public policy. They 
have been made possible because Congress and every Administration since 
Ronald Reagan's have recognized that global agriculture is heavily 
impacted by foreign governments. American producers cannot succeed 
without a reasonable partnership with our government. To give up this 
supportive partnership is to cede the playing field to foreign 
producers and the governments that stand behind them.
    If American agriculture is to remain globally competitive, the 
Coalition to Promote U.S. Agricultural Exports believes the 
Administration and Congress should ensure the strength of MAP and the 
other valuable export programs as part of a robust trade component in 
the new farm bill and encourage their aggressive utilization. We 
further believe the current system of funding under these FAS programs, 
based upon the competitive merit of each applicant proposal, works well 
and should not be changed. We do not believe that targeting funds to 
specific sectors is necessary or prudent.
    Thank you again for the opportunity to testify today before the 
Committee and for your leadership on U.S. agriculture exports. We ask 
that the Market Access Program and our other vital FAS programs be 
sustained to help ensure the competitiveness of American producers in 
the increasingly competitive global marketplace.
                               Attachment

        Coalition To Promote U.S. Agricultural Exports Membership
                                  2011



Alaska Seafood Marketing Institute   National Barley Growers Association
American Cotton Exporters            National Cattlemen's Beef
 Association                          Association
American Cotton Shippers             National Chicken Council
 Association
American Farm Bureau Federation      National Confectioners Association
American Feed Industry Association   National Corn Growers Association
American Forest and Paper            National Cotton Council
 Association
American Hardwood Export Council     National Council of Farmer
                                      Cooperatives
American Meat Institute              National Farmers Union
American Peanut Council              National Grange
American Quarter Horse Association   National Grape Cooperative
                                      Association, Inc.
American Seed Trade Association      National Milk Producers Federation
American Sheep Industry Association  National Oilseed Processors
                                      Association
American Soybean Association         National Pork Producers Council
Atlantic Seaboard Wine Association   National Potato Council
Blue Diamond Growers                 National Renderers Association
Calcot, Ltd.                         National Sorghum Producers
California Agricultural Export       National Sunflower Association
 Council
California Apple Commission          National Turkey Federation
California Asparagus Commission      Nebraska Wheat Board
California Association of Wheat      Nebraska Wheat Growers Association
 Growers
California Association of Winegrape  New York Wine & Grape Foundation
 Growers
California Blueberry Commission      NORPAC Foods, Inc.
California Canning Peach             North American Millers' Association
 Association
California Cherry Export             North Dakota Grain Growers
 Association                          Association
California Cling Peach Board         North Dakota Wheat Commission
California Dried Plum Board          Northwest Cherry Growers
California Farm Bureau Federation    Northwest Horticultural Council
California Fig Advisory Board        Northwest Wine Coalition
California Grape and Tree Fruit      Ocean Spray Cranberries, Inc.
 League
California Kiwifruit Commission      Oklahoma Wheat Growers Association
California Pear Advisory Board       Oregon Wheat Commission
California Pear Growers              Oregon Wheat Growers League
California Pistachio Export Council  Peace River Valley Citrus Growers
                                      Association
California Plum Marketing Board      Pet Food Institute
California Strawberry Commission     Produce Marketing Association
California Table Grape Commission    Shelf-Stable Food Processors
                                      Association
California Tomato Farmers            Softwood Export Council
California Walnut Commission         South Dakota Wheat Commission
California Wheat Commission          Southern Forest Products
                                      Association
Cal Pure Pistachio, Inc.             Southern U.S. Trade Association
Cherry Marketing Institute           Sunkist Growers
CoBank                               Sun Maid Growers of California
Colorado Association of Wheat        Sunsweet Growers, Inc.
 Growers
Colorado Wheat Administrative        Texas Cattle Feeders Association
 Committee
Dairy Farmers of America             Texas Wheat Producers Association
Dairylea Cooperative, Inc.           Texas Wheat Producers Board
Distilled Spirits Council of the     The Catfish Institute
 United States
Florida Citrus Commission            The Farm Credit Council
Florida Citrus Mutual                The Popcorn Institute
Florida Citrus Packers Association   Tree Top, Inc.
Florida Citrus Processors            United Durum Growers
 Association                          AssociationUnited Egg Association
Florida Department of Citrus         United Egg Producers
Florida Fruit & Vegetable            United Fresh Produce Association
 Association
Florida Peanut Producers             USA Dry Pea and Lentil Council
 Association
Food Export Association of the       USA Poultry & Egg Export Council
 Midwest USA
Food Export USA--Northeast           USA Rice Federation
Georgia Poultry Federation           U.S. Apple Association
Ginseng Board of Wisconsin           U.S. Apple Export Council
Gulf Citrus Growers Association      U.S. Dairy Export Council
Hardwood Federation                  U.S. Dry Bean Council
Highlands County Citrus Growers      U.S. Grains Council
 Association, Inc.
Hop Growers of America, Inc.         U.S. Hides, Skins & Leather
                                      Association
Idaho Wheat Commission               U.S. Livestock Genetics Export,
                                      Inc.
Indian River Citrus League           U.S. Meat Export Federation
Kansas Association of Wheat Growers  U.S. Rice Producers Association
Kansas Livestock Association         U.S. Wheat Associates, Inc.
Kansas Wheat Commission              Utah Department of Agriculture
Kentucky Distillers' Association     Valley Fig Growers
Land O'Lakes, Inc.                   Virginia Wineries Association
Leather Industries of America        Washington Apple Commission
Maryland Grain Producers             Washington State Fruit Commission
 Association
Minnesota Association of Wheat       Washington Wheat Commission
 Growers
Minnesota Wheat Research and         Welch Foods Inc., A Cooperative
 Promotion Council
Mohair Council of America            Western Growers Association
Montana Grain Growers Association    Western Pistachio Association
Montana Wheat and Barley Committee   Western U.S. Agricultural Trade
                                      Association
National Association of State        WineAmerica (The National
 Departments of                       Association of American Wineries)
Agriculture                          Winegrape Growers of America
National Association of Wheat        Wine Institute
 Growers



    The Chairman. Mr. Censky.

   STATEMENT OF STEPHEN L. CENSKY, CHIEF EXECUTIVE OFFICER, 
          AMERICAN SOYBEAN ASSOCIATION, ST. LOUIS, MO

    Mr. Censky. Good morning, Mr. Chairman and Members of the 
Subcommittee. I am Stephen Censky. I am CEO of the American 
Soybean Association. ASA is the national, not-for-profit 
organization that represents U.S. soybean farmers on policy and 
international issues. We commend you for holding this hearing 
today to review the effectiveness of export promotion programs.
    Soybeans and soybean products are our country's number one 
ag export commodity. Last year we exported a record-setting $23 
billion in soybeans, soybean oil, and soybean meal. This 
impressive export growth would not have been possible without 
the unique government-industry partnership that characterizes 
the Foreign Market Development Cooperator Program and the 
Market Access Program administered by the Foreign Agricultural 
Service.
    These programs have been tremendously successful and 
extremely cost effective in helping to expand exports of U.S. 
soybeans as well as other agriculture commodities including 
corn, wheat, rice, cotton, livestock, meat products, dairy, 
forest products, peanuts, seafood, and a host of horticultural 
products. I have been asked by the Subcommittee to focus on the 
role of the Foreign Market Development Cooperator Program in 
expanding exports.
    The FMD Program is a public-private program dedicated to 
the long-term development of foreign agriculture markets. Under 
FMD U.S. Government funding is leveraged by the contributions 
made by U.S. farmers, ranchers, and agriculture industry to 
carry out targeted market development activities. The FMD 
Program provides cost-share assistance to establish an on-the-
ground presence in markets to identify new markets and to 
address foreign import constraints.
    Under the FMD Program private sector organizations such as 
ASA, U.S. Wheat Associates, U.S. Grains Council, USA Rice 
Federation, Cotton Council International, American Peanut 
Council, and other cooperators work with U.S. producers, 
exporters, and others to develop strategic marketing plans that 
detail market characteristics, the constraints limiting U.S. 
exports in those markets, and proposed activities to overcome 
those constraints.
    These marketing plans are submitted to FAS as a unified 
export strategy for each commodity. FAS then reviews all 
submitted unified export strategies and makes FMD funding 
allocations based on criteria published in the FMD regulations 
that include cost-share contributions by U.S. industry, 
capabilities and experience of the cooperator in successfully 
developing markets and increasing exports, importance of the 
commodity to overall U.S. trade, and anticipated increases in 
U.S. exports resulting from the FMD funding.
    ASA became a cooperator back in 1956, when we opened the 
Foreign Market Development Program in Tokyo, Japan. At that 
time Japan was only importing small quantities of U.S. 
soybeans. Over the years ASA worked with feedmillers and the 
Japanese swine, dairy, and poultry industries to educate and 
demonstrate the value of putting high-quality soybean meal made 
from U.S. soybeans in feed rations and to link Japanese 
importers with U.S. exporters, both on the soybean as well on 
the food-grade soybean sides. Today Japan is a top market for 
U.S. soybean, surpassed only by China and Mexico. U.S. soybean 
exports to Japan are valued at $1.3 billion last year.
    I would like to quickly make four key points about the FMD 
Cooperator Program. First is that the FMD is cost effective. 
According to the Global Insight Study that has been referenced 
here, the multi-year impact of market development expenditures 
is equal to $35 in export gains for each dollar spent.
    Number two, the FMD Program increases the U.S. exports of 
U.S. agriculture products. I have highlighted Japan and could 
mention many more as similar success stories could be told by 
market development cooperators representing U.S. corn, rice, 
wheat, cotton, livestock, forestry, horticultural product, and 
other commodities.
    Number three, the FMD Program helps U.S. agriculture 
overcome the effects of foreign trade practices. Mr. Wootton 
has mentioned that the EU has announced that they are going to 
be spending over a billion dollars on promoting agriculture 
exports, and that it plans to increase this amount on an annual 
basis. By comparison, the U.S. will spend approximately $34.5 
million on FMD and MAP this year.
    And number four, the FMD Program helps keep U.S. 
agriculture commodities strong and in turn support over one 
million jobs. These jobs are on the farm and the ranch, in the 
forest, on the water, as well as in banking, transportation, 
finance, processing, and other industries.
    In conclusion, the Foreign Market Development Cooperator 
Program and the Market Access Program are among the few tools 
that American agriculture and farmers have to remain 
competitive in the global marketplace. They support over one 
million jobs, not only on the farms and ranches but also in the 
processing and export-related industries. ASA hopes that 
Congress will maintain funding for agriculture export promotion 
programs and for the Foreign Agricultural Service of USDA.
    I would be happy to answer any questions the Subcommittee 
may have. Thank you.
    [The prepared statement of Mr. Censky follows:]

   Prepared Statement of Stephen L. Censky, Chief Executive Officer, 
              American Soybean Association, St. Louis, MO
    Good morning, Mr. Chairman and Members of the Subcommittee. I am 
Stephen Censky, and I serve as Chief Executive Officer of the American 
Soybean Association (ASA). ASA is the national, not-for-profit 
organization that represents U.S. soybean farmers on policy and 
international issues. We appreciate the opportunity to appear before 
you today, and commend you for holding this hearing to review export 
promotion programs and their effectiveness in expanding exports of U.S. 
agricultural products.
    Soybeans and soybean products are our country's number one export 
commodity. Last year, we exported a record-setting $23 billion in 
soybeans, soybean oil and soybean meal. This amount represents \1/5\ of 
all U.S. agricultural exports and over 50 percent of U.S. soybean 
production.
    This impressive export growth could not have been achieved without 
the unique government-industry partnership that characterizes the 
market development and export promotion programs administered by the 
Foreign Agricultural Service (FAS) and carried out by organizations 
representing U.S. farmers and ranchers. By any measure, the Foreign 
Market Development ``Cooperator'' Program and the Market Access Program 
have been tremendously successful and extremely cost-effective in 
helping expand U.S. exports of soybeans and other agricultural 
commodities such as corn, wheat, rice, cotton, livestock and meat 
products, dairy, forest products, peanuts, seafood, and a host of 
horticultural products. I have been asked by the Subcommittee to 
concentrate my testimony on the Foreign Market Development Cooperator 
Program and its role in expanding U.S. agricultural exports.
The Foreign Market Development (Cooperator) Program
    The Foreign Market Development (FMD) Program is a public-private 
partnership program dedicated to long term market development of 
foreign markets for U.S. agricultural exports. Under the FMD program, 
U.S. Government funding is leveraged with contributions by U.S. 
farmers, ranchers, and agri-industry to carry out targeted market 
development activities. Activities implemented under the FMD program 
are most often focused on opening and maintaining foreign markets, 
while working on long-term changes to key constraints affecting a 
market to allow for increased U.S. exports. It allows U.S. market 
development organizations that represent U.S. farmers and ranchers 
(referred to as ``Cooperators'' due to the cooperative private-public 
partnership they have with FAS) to establish an on-ground country or 
regional presence, identify new markets and address long-term foreign 
import constraints and export growth opportunities. The FMD Program 
provides cost-share assistance to allow market development cooperators 
to:

    1. Conduct market research. This includes: investigating the volume 
        of in-country product to meet demand in a market; the 
        suitability/viability of in-country product; the compatibility 
        of U.S. product; variables to market success; importance of 
        exports from other competing countries; history of product 
        domestically/internationally; competitiveness of U.S. product; 
        infrastructure capabilities to import U.S. products; and access 
        to importers/processors/retailers.

    2. Carry out market analysis. This includes: determining the size 
        of a current market; potential size of the market in the future 
        if structural changes were made to allow for an improved market 
        environment; the opportunity for U.S. exports and likely U.S. 
        share; impediments to trade; political situation, demographics, 
        and economic stability of the market; long-term viability of 
        in-country demand; and government accessibility and regulatory 
        environment for market access.

    3. Implement long-term market development activities following up 
        on favorable market research and analysis. Implementation of 
        market development activities constitutes the bulk of funding 
        and activities under the FMD program. Market development 
        activities include: supporting the long-term presence of people 
        and office facilities in key markets to develop sound and 
        expanding trade relationships; providing technical assistance 
        to buyers and users of the product; capacity building and 
        education through seminars and one-on-one work that ensure 
        market growth for participating commodities and products; 
        facilitating trade teams to U.S. to see U.S. production 
        standards and supply infrastructure; facilitating U.S. farmer, 
        rancher, and industry visits to current and prospective markets 
        to develop import networks and product specifications to meet 
        local market needs.

    Under the FMD program, private sector Cooperators such as ASA, U.S. 
Wheat Associates, U.S. Grains Council, USA Rice Federation, Cotton 
Council International, National Peanut Council and others commodity 
Cooperators work with U.S. producers, exporters, and others in the 
industry to develop strategic marketing plans detailing market 
characteristics, constraints limiting U.S. exports, and proposed 
activities to overcome those constraints. These detailed marketing 
plans are submitted to FAS as a ``Unified Export Strategy'' for the 
U.S. commodity in question. FAS reviews all submitted Unified Export 
Strategies and makes FMD funding allocations based on criteria included 
in FMD program regulations that include cost-share contributions by 
U.S. industry, capabilities and experience of the Cooperator in 
successfully developing markets and increasing U.S. exports, importance 
of the commodity in overall U.S. agricultural trade, and anticipated 
increases in U.S. exports resulting from the FMD funding.
Examples of How ASA Has Utilized FMD Program Cost-Share Funding to 
        Develop Foreign Markets for U.S. Soybeans and Products
    ASA became the first USDA-funded Cooperator under the FMD program 
in 1956, when we opened a foreign market development program in Tokyo, 
Japan. At that time, Japan was importing only small quantities U.S. 
soybeans, and the Japanese had expressed concerns about the quality of 
U.S. soybeans. During our first year, ASA participated in a series of 
trade fairs and partnered with a coalition of Japanese business 
interests in conducting market development activities. Our in-country 
staff worked closely with Japanese industry leaders at all stages, from 
buyer to retailer, as well as with university and research technicians, 
and the technical and popular news media.
    Japan proved to be an ideal country to begin export promotion, 
becoming our largest foreign market in the 1970s, 1980s, and 1990s. 
Over the years ASA worked with: feedmillers and the Japanese swine, 
dairy, and poultry industries to educate and demonstrate the value of 
putting high-quality soybean meal made from U.S. soybeans in feed 
rations; Japanese soybean processors and importers to develop close and 
outstanding trade relations; Japanese processors to increase the 
quality and demand for soybean oil made from U.S. soybeans, both in the 
human utilization market as well as in the industrial and printing ink 
markets; and Japanese tofu, natto, and miso industries to demonstrate 
the quality of U.S. food grade soybeans and to link Japanese importers 
with U.S. exporters. Our office in Tokyo continues to service this 
critical market today, and Japan remains a top market for U.S. soybean 
products, surpassed only by China and Mexico. U.S. exports of soybeans 
to Japan today are valued at $1.3 billion.
    ASA went on to open other foreign offices and to conduct market 
development activities in other markets. From regional and country 
offices located in strategic areas, ASA International Marketing staff 
and consultants today continue to implement market development 
activities with customers around the world that are increasing demand 
for U.S. soybeans and soy products.
    But while Japan represents our first success story, China is 
perhaps our most impressive. ASA opened an office in Beijing in 1982. 
At that time China did not have a vertically-integrated animal feed 
industry, and livestock production lacked health and nutritional 
standards. China has the largest swine herd on the planet, but much of 
it was backyard-based and did not include soybean meal in diets. 
Similarly, while China produces more fresh water aquaculture fish than 
the rest of the world combined, 20 years ago none of the fish feed 
included soybean meal. Through a long term and comprehensive program of 
demonstrating the value of soy-based feeds, ASA helped build demand for 
soybeans to the level China imports today. Since 1995, while feed use 
in China grew 140 percent, soybean meal used in animal feed rose an 
astronomical 839 percent. And we've seen the amount of soybean meal 
used in aquaculture feeds grow from zero just 20 years ago to 7 million 
metric tons this year. The value of U.S. soybean exports to China has 
grown 26-fold, from $414 million in 1996 to over $11 billion in 2010.
    Many other successes can be cited to demonstrate the value of the 
FMD program in expanding U.S. agricultural exports around the world. 
FMD-supported programs began in Turkey in the 1980s. At that time, U.S. 
soy exports were valued at only $4 million annually and the United 
States was only a minor supplier. With support from the FMD program, 
ASA and the soybean industry began working with Turkey's poultry and 
feedmilling industries to educate them on the value of using soybean 
meal in rations. Later, as local investors and companies developed 
plans to build soybean processing plants in Turkey, ASA provided 
technical assistance and developed close trade relations, educating 
these buyers on how to buy from the United States, how to hedge price 
risk, and how to produce high-quality products from U.S. soybeans. 
Poultry producers now enjoy the benefit of better quality feed, U.S. 
equipment manufacturers have seen their sales to Turkey grow, and the 
U.S. soybean industry continues to grow soybean exports. Today, 
Turkey's imports of U.S. soybeans, meal and oil have reached $310 
million, with the U.S. being the dominant supplier. Fueled by economic 
growth and a rising standard of living, Turkey's consumption of poultry 
and vegetable oil continues to grow today.
    Mexico is another example. With technical assistance and education 
and nutrition seminars sponsored by ASA International Marketing, Mexico 
has gained an appreciation of the benefits of soy for human 
consumption. Mexico's retailers now sell millions of liters of soy-
fruit beverages, among other products. And U.S. soy exports have grown 
over the years from virtually zero in the late 1970's to the current 
value of $2.1 billion.
    The FMD program provides cost-share assistance to ASA to implement 
activities that have set the stage for the growth of U.S. soybean 
exports. With the assistance of the FMD program, we have launched a 
large number of feeding and demonstration trials in key international 
markets. Through capacity building activities such as training and on-
farm consultations to promote improved swine and poultry practices, as 
well as education on the benefits of soy protein for human consumption, 
the FMD program has been extremely successful in helping us develop 
product specifications and the supply networks to build demand for our 
products and meet local market needs. More recently, we have engaged in 
market development activities to promote the use of soy for industrial 
products such soy ink, solvents, lubricants, and engine oils, to name 
just a few. All the market development work in which we have engaged 
over the years has been made possible with the FMD funds.
    These FMD funds have been leveraged with contributions by U.S. 
soybean farmers themselves through the soybean checkoff, as well as 
with contributions by U.S. exporters. Today, the FMD funds ASA receives 
are leveraged with soybean farmer and industry funding on a 2-to-1 
basis--meaning that for every $1 invested in market development by the 
FMD program, U.S. soybean farmers and industry are investing $2 to more 
than match FMD funding.
Four Important Points about the FMD ``Cooperator'' Program
    1. FMD is cost-effective. Funds are awarded on a competitive basis 
via a comprehensive industry strategy evaluated by FAS using a formula 
that takes into consideration export potential, experience with 
managing export programs as well as industry contributions. The process 
helps ensure that U.S. taxpayer's money is being invested in the 
agricultural sector and organization with the highest chance of 
success. Every organization that participates in the FMD program must 
contribute its industry's resources to the program. Thus, U.S. 
Government expenditures actually leverage more resources for foreign 
market development than American agriculture would be able to 
accomplish with only private sector funds.
    From 2002-2009, the last year for which figures are available, the 
multi-year impact of the increase in market development expenditures by 
both industry and government is equal to $35 in agricultural export 
gains for each dollar spent. In addition, total economic gain to the 
U.S. economy is estimated to be an annual average of $1.1 billion from 
increased market development activity. Further, government spending for 
domestic supports (loan deficiency payments and countercyclical 
payments) fell about $0.30 for every $1 spent on FMD.
    2. The FMD program increases export of U.S. agricultural products. 
I've highlighted just a few examples of how U.S. soybean farmers have 
successfully utilized cost-share assistance provided under the FMD 
program to develop long-term markets and increase exports. Similar 
success stories can be told by the U.S. corn, rice, wheat, cotton, 
livestock, forestry, and horticultural product industries.
    3. The FMD program helps U.S. agriculture overcome the effects of 
foreign trade practices. U.S. agricultural exports often face 
subsidized or otherwise unfair competition from foreign products. U.S. 
agricultural organizations utilize FMD resources to combat the 
multitude of challenges in the international marketplace. As just one 
example of the competition we face, the European Union recently 
announced that it will spend the equivalent of $1.0 billion this year 
on promoting agricultural exports, and that it plans to increase this 
amount on an annual basis. By comparison, the U.S. will spend 
approximately $248 million on FMD and MAP this year.
    4. The FMD program helps keep U.S. agricultural exports strong, 
which in turn supports almost one million American jobs. These jobs 
were on the farm, ranch, in the forest and on the water, as well as in 
banking, transportation, processing and other related industries. Every 
state and local economy in the U.S. has jobs that are dependent upon 
healthy exports of U.S. agricultural products.
Conclusion
    The Foreign Market Development ``Cooperator'' program and Market 
Access Program (MAP) are among the few tools that help American 
agriculture and American farmers remain competitive in the global 
marketplace. They are considered to be non-trade distorting or ``Green 
Box'' programs under World Trade Organization (WTO) rules.
    These cost-share market development and export promotion programs 
help keep U.S. agricultural exports strong, which in turn support over 
one million American jobs. These jobs are on U.S. farm and ranches, but 
also are in processing, transportation, financing, and other related 
industries. Every state and local economy in the U.S. has jobs that are 
dependent upon healthy exports of U.S. agricultural products.
    Agricultural exports have for years been the strongest positive 
contributor to our nation's balance of trade. Increasing exports is a 
significant tool to improve the lives of America's farmers and ranchers 
while creating jobs, improving our balance of trade, expanding the farm 
economy and larger U.S. economy, and increasing receipts to the 
Treasury. The FMD and MAP programs have been critically important to 
this success. ASA hopes this hearing will strengthen the resolve of 
Congress to maintain current support for agricultural export promotion 
programs, as well as strong support for the Foreign Agricultural 
Service of USDA. I would be happy to answer any questions the 
Subcommittee may have.

    The Chairman. Thank you. Mr. Lively.

   STATEMENT OF R. THAD LIVELY, SENIOR VICE PRESIDENT, TRADE 
        ACCESS, U.S. MEAT EXPORT FEDERATION, DENVER, CO

    Mr. Lively. Thank you, Mr. Chairman. Good morning. My name 
is Thad Lively. I am the Senior Vice President for Trade Access 
at the U.S. Meat Export Federation, and I am very pleased to be 
here today to talk to the Committee about USDA's Emerging 
Markets Program.
    Before I offer my comments on the EMP Program, however, I 
would like to first say a few words about the organization I 
work for, the U.S. Meat Export Federation. USMEF is a nonprofit 
trade association based in Denver, Colorado. Our mission to 
increase the profitability of the U.S. beef, pork, and lamb 
industries by expanding exports and maximizing the value of 
U.S. red meat production.
    USMEF has been a participant in USDA's export programs 
since it was founded in 1976. In recent years we have been the 
second largest recipient of funding under the Market Access 
Program in addition to participating in the Foreign Market 
Development and EMP Programs. The financial support we receive 
from the USDA is matched by producers and meat exporting 
companies, most of which are small or medium-sized enterprises 
that actively participate in USMEF programs.
    The combination of strong government and industry support 
for USMEF and its programs has provided the foundation for what 
has been a very effective public-private partnership in export 
market development for the red meat industry. Last year the 
value of U.S. beef, pork, and lamb exports reached $8.9 
billion. This represented a 32 percent year-over-year increase 
for beef and a ten percent increase for pork. Growing economies 
in countries like China, Russia, Mexico, and the Philippines 
are fueling demand for beef and pork exports, and this is 
making an important contribution to the continued health and 
profitability of the red meat industry.
    Of course, the continued growth in exports assumes that the 
United States will have unfettered access to export markets as 
they develop. Unfortunately, as we all know, to an increasing 
degree, this is not the case as countries find new and creative 
ways to protect their domestic agriculture industries through 
non-tariff trade barriers that limit imports.
    To cite just one example, we estimate that the United 
States is losing roughly $1.4 billion in beef exports annually 
due to the non-science-based BSE-related import restrictions 
that are in place in Japan, China, Mexico, and Hong Kong.
    Finding effective ways of addressing these kinds of trade 
barriers is the single biggest challenge facing U.S. beef and 
pork industries as they pursue their goal of increasing 
exports.
    A critical component of the red meat industry's strategy 
for eliminating these non-science-based market access barriers 
has been the kinds of activities that are funded by USDA's 
Emerging Markets Program. The EMP Program provides funding for 
technical assistance activities that support U.S. exports and 
assists the food and rural business systems of emerging 
markets.
    Emerging markets are defined as countries that are taking 
steps towards becoming market-oriented economies and which have 
the potential to become viable and significant export markets 
for U.S. agriculture. Examples of emerging markets include 
countries as diverse as China, Indonesia, Mexico, and Russia.
    EMP funding is allocated by FAS on an annual basis but also 
in response to time-sensitive technical barriers to trade and 
marketing opportunities as they arise. The ability to respond 
quickly to developments in foreign markets makes the EMP 
Program especially well suited to the needs of the agricultural 
export industry.
    EMP funds have been used to support a wide variety of 
technical assistance projects, but USMEF experience with the 
program has been centered on projects that address market 
access constraints. We have been able to benefit especially 
from FAS's ability to quickly review and approve our requests 
for support to engage importing countries on a number of 
rapidly-emerging market access issues, most of which have 
stemmed from non-science-based trade barriers.
    Perhaps the most notable exception of USMEF's use of EMP 
funds is associated with our response to the BSE crisis in the 
beef industry when countries around the world closed their 
markets to U.S. beef. Fundamental to convincing countries to 
reopen their markets has been our ability to restore the 
confidence of foreign governments in the safety of U.S. beef.
    As part of this effort USMEF has been able to draw in EMP 
funds to bring animal and public health officials from a number 
of countries, including Mexico, Russia, the Philippines, and 
Egypt to the United States. During these visits we have worked 
closely with USDA to educate these decision makers in foreign 
governments on the science of BSE and the BSE risk mitigation 
measures that are in place in this country. The training the 
foreign officials have received on these EMP-sponsored trips 
has made a significant contribution to the decisions by many 
countries to relax and in some cases eliminate their BSE-
related import restrictions.
    USMEF has also drawn----
    The Chairman. The gentleman's time has expired. You want to 
bring your comments to a close.
    Mr. Lively. Okay. Thank you very much, sir. I appreciate 
the time and look forward to your questions.
    [The prepared statement of Mr. Lively follows:]

  Prepared Statement of R. Thad Lively, Senior Vice President, Trade 
            Access, U.S. Meat Export Federation, Denver, CO
    Good morning. My name is Thad Lively. I am the Senior Vice 
President for Trade Access at the U.S. Meat Export Federation, and I am 
very pleased to be here today to talk about USDA's Emerging Markets 
Program (EMP).
    Before I offer my comments on the EMP program, I would like to say 
a few words about the organization I work for, the U.S. Meat Export 
Federation. USMEF is a nonprofit trade association based in Denver, 
Colorado. Our mission is to increase the profitability of the U.S. 
beef, pork, and lamb industries by expanding exports and maximizing the 
value of U.S. red meat production. We do this by conducting export 
market development and promotion programs for beef, pork, and lamb in 
over 60 countries around the world. We also work with the U.S. 
Government and our industry partners to eliminate trade barriers and 
open up new export opportunities through expanded market access.
    USMEF has been a participant in USDA's export programs since it was 
founded in 1976. In recent years, we have been the second largest 
recipient of funding under the Market Access Program, in addition to 
participating in the Foreign Market Development and EMP programs. The 
financial support we receive from the USDA is matched by beef, pork, 
corn, and soybean producers, who invest in USMEF's export programs 
through the checkoff. In addition, USMEF's membership includes over 125 
meat exporting companies, most of which are small small-to-medium sized 
enterprises, which collectively provide significant financial support 
to USMEF and are active participants in many of our export programs. 
The combination of strong government and industry support for USMEF and 
its programs has provided the foundation for what has been a very 
effective public-private partnership in export market development for 
the red meat industry.
    Last year, the value of U.S. beef, pork, and lamb exports reached 
$8.9 billion. This represented a 32 percent year-over-year increase for 
beef and a ten percent increase for pork. Exports now account for 12 
percent of U.S. beef production and close to 25 percent of our annual 
output of pork. Growing economies in countries like China, Russia, 
Mexico, and the Philippines are fueling demand for red meat exports. 
Since consumption of beef and pork in the United States is forecast to 
experience very limited growth in the future, exports hold the key to 
the continued health and profitability of the red meat industry.
    Of course, this assumes that the United States will have unfettered 
access to export markets as they develop, and this increasingly is not 
the case, as countries find new, creative ways to protect their 
domestic industries through non-tariff trade barriers that limit beef 
and pork imports. To cite just one example, we estimate that the United 
States is losing roughly $1.4 billion in beef exports annually due to 
the non-science-based, BSE-related import requirements that are in 
place in Japan, China, Mexico, and Hong Kong. Finding effective ways of 
addressing these kinds of trade barriers is the single biggest 
challenge facing the U.S. beef and pork industries as they pursue their 
goal of increasing exports.
    A critically important component of the red meat industry's 
strategy for eliminating non-science-based market access barriers has 
been the kinds of activities that are funded by USDA's EMP program. The 
Emerging Markets Program provides funding to private and public 
organizations for technical assistance activities that improve access 
to emerging markets. Emerging markets are defined as countries that are 
taking steps toward becoming market-oriented economies and which have 
the potential to become viable and significant export markets for U.S. 
agriculture. Examples of emerging markets include countries as diverse 
as China, Malaysia, Mexico, and Russia. Consistent with the objectives 
of the program, EMP funds can only be used for projects that assist the 
food and rural business systems of the importing country in addition to 
supporting U.S. exports.
    The Emerging Markets Program is authorized by the farm Bill, and 
funding for the program from the Commodity Credit Corporation currently 
is set at $10 million a year. FAS administers the program according to 
regulations that specify reporting, evaluation, and compliance 
requirements and describe the rules for cost sharing. According to the 
cost sharing provisions, private sector recipients of EMP funds are 
required to commit their own resources to the proposed project in order 
to qualify for funding under the program. Through its administration of 
the EMP program FAS ensures that approved projects complement and 
support the objectives of the other export programs.
    EMP funding is allocated by FAS through three different channels. 
The first of these, the Central Fund, is the primary means of 
allocating EMP funds on an annual basis. In addition to the Central 
Fund, FAS has the capacity to quickly review and approve projects which 
specifically address time-sensitive technical barriers to trade and 
marketing opportunities as they arise. These channels are referred to 
as the Technical Issues Resolution Fund, or TIRF, and the Quick 
Response Marketing Fund. The ability to respond quickly to developments 
in foreign markets makes the EMP program especially well-suited to the 
needs of the agricultural export industry.
    EMP funds have been used to support a wide variety of technical 
assistance projects, including feasibility studies, market research, 
sectoral assessments, orientation visits, specialized training, and 
business workshops. USMEF's experience with the program has been 
centered on projects that addressed market access constraints. We have 
been able to benefit especially from FAS's ability to respond quickly 
to our requests for support under the TIRF fund. The availability of 
TIRF funding has permitted us to effectively engage importing countries 
on a number of rapidly emerging market access issues, most of which 
have stemmed from non-science-based trade barriers.
    Perhaps the most notable example of USMEF's use of EMP funds is 
associated with our response to the BSE crisis in the beef industry. 
After the United States reported its first case of BSE in late 2003, 
most countries around the world closed their markets to U.S. beef 
exports. It quickly became clear that as part of convincing countries 
to re-open their markets we would need to restore the confidence of 
foreign governments in the safety of U.S. beef. This has proven to be a 
much larger and more complex task than we imagined, but over the past 7 
years, we have succeeded in changing the thinking of officials in many 
countries about BSE and have made major inroads in turning around 
negative perceptions of U.S. beef.
    As part of this effort, USMEF has been able to draw on EMP funds to 
bring animal and public health officials from a number of countries, 
including Mexico, Russia, the Philippines, and China, to the United 
States. During these visits, we have worked closely with USDA to 
educate these decision-makers in foreign governments on the science of 
BSE and the BSE risk mitigation measures that are in place in this 
country. The training that foreign officials have received on these 
EMP-sponsored trips has made a significant contribution to the 
decisions by many countries to relax or eliminate their BSE-related 
import restrictions. Although as I have already noted, we still have 
work to do, the recovery of U.S. beef exports is well advanced, and the 
value of exports last year exceeded the pre-BSE level for the first 
time since 2003.
    In addition to using EMP funds to educate foreign officials on BSE, 
USMEF also has drawn on EMP funding to support similar activities that 
were designed to address market access barriers to pork exports. In 
several of these cases, USMEF has been able to work jointly with the 
USA Poultry and Egg Export Council to request EMP funds for projects 
that benefited the pork and poultry industries equally. For example, 
after Russia de-listed a number of pork and poultry slaughterhouses, 
the EMP program supported a visit to the United States by Russian 
veterinary officials in the fall of 2009. This trip was the first in a 
series of activities to educate Russian officials on U.S. pork and 
poultry production practices and explain the scientific basis for the 
many differences between U.S. and Russian meat hygiene and inspection 
requirements. Although Russia has not yet recognized the equivalence of 
the U.S. meat inspection system, the ongoing technical exchange with 
the Russian veterinary authorities has increased their confidence in 
the U.S. system and fostered a more open, constructive working 
relationship.
    In closing, I would like to thank you again for this opportunity to 
speak on behalf of USDA's export programs and the EMP program in 
particular.

    The Chairman. Sorry to have to do that.
    Mr. Hamilton.

  STATEMENT OF TIM HAMILTON, EXECUTIVE DIRECTOR, FOOD EXPORT 
            ASSOCIATION OF THE MIDWEST USA AND FOOD
               EXPORT USA--NORTHEAST, CHICAGO, IL

    Mr. Hamilton. Thank you, Mr. Chairman. My name is Tim 
Hamilton. I represent two of the four State Regional Trade 
Groups. These are associations of the State Departments of 
Agriculture, ten in the Northeast and 12 in the Midwest. Like 
our counterparts in the West and the South, we work with our 
member agencies strictly to focus on helping small companies 
export. We use funding from the Market Access Program in a 
variety of ways to conduct outreach to these companies, to 
provide training, technical support, and promotional funding to 
help them boost their overseas sales. At a time when Congress 
is looking for ways to reduce government funding, we believe we 
can provide you with some compelling reasons to maintain 
funding for these programs.
    Our foreign competition would like nothing better than to 
see the U.S. reduce its support for agricultural exports. If 
that happens, we will simply be handing these sales and the 
jobs that they support to our overseas competition. We can keep 
these jobs in the United States, or we can stop promoting our 
U.S. exports and watch these jobs go overseas.
    At the state regional trade groups we and our member states 
focus exclusively on small companies or SMEs. Many of these 
firms are family owned. Most of them are food processors that 
use agricultural commodities as inputs, which they turn into 
finished goods for export. Their products vary from snack foods 
to convenience foods, food ingredients, organic products, 
literally soup to nuts. These are companies that have been 
successful in the domestic market, often for generations, but 
in most cases they have never even considered the export 
market.
    Food and agricultural producers are challenged to find 
growth opportunities here at home, but at the same time 
emerging markets overseas offer huge growth potential for these 
companies if only they know about the opportunities and how to 
take advantage of them.
    Small firms are often reluctant at first, unsure of how 
they might be successful doing business in another language, 
another currency, another culture. We provide education and 
training to help them identify where their best markets might 
be and what hurdles they may need to overcome.
    Once a small company is ready to begin exporting, their 
first challenge is to find customers. We use MAP funds to 
prepare these small companies and to arrange meetings for them 
with qualified international buyers. This might be done in the 
U.S. as part of buying missions, it might be done overseas as 
part of a trade mission, at trade shows, or other ways. I have 
included several examples of this in my written testimony.
    Once companies have become established in the market, it 
isn't enough just to have a customer. It is essential that they 
promote those products in these competitive markets. 
Fortunately we are able to offer some limited promotional 
support to these small companies through the MAP Program.
    In addition, the Quality Samples Program is a small 
program, only $2.5 million, which is intended to help U.S. 
agricultural trade organizations provide samples of their 
agricultural products to potential customers overseas. Since 
the QSP focuses more on commodity products which need to be 
further altered, the state regional trade groups focus more on 
finished goods. So we have had less opportunity to use the QSP 
Program.
    However, the QSP was used very successfully from 2001 to 
2005 by the western regional trade group. The small projects 
that they initiated under the QSP paved the way for several 
U.S. agricultural products by creating trade interests for 
seafood in Korea, tomatoes in Japan, and many varieties of 
fruits and nuts to Taiwan and China. And these products and 
producers have now graduated into larger scale MAP projects.
    Many of the jobs supported by agricultural exports are 
intrinsically U.S. jobs. They cannot be out-sourced overseas. 
They are tied to farm production here in the United States. The 
products are grown here, and they are processed here. If we 
maintain these overseas markets, then these jobs will continue 
to be held by Americans. If we lose these overseas markets, we 
risk losing these jobs to our competitors in China, Europe, and 
elsewhere.
    In our work with international customers we are constantly 
reminded of the extensive support that our competitor nation 
offer to our customers. Buyers enjoy lavish treatment made 
possible by support from European or other governments. You can 
attend just about any international trade show, and you will 
see spectacular national exhibits by China, by Europe, and by 
Chile or many of our competitors. Even small countries like 
Taiwan and the Netherlands have grand displays, often in stark 
contrast to the U.S. exhibit, which is modest and spare.
    For the U.S. economy to grow not just out of this recession 
but to continue to be competitive we need to produce products 
that the world wants to buy. U.S. food and agricultural 
products are recognized around the world for being safe, high 
quality, and innovative. This is a real opportunity for our 
country and for our economy. Every day we see small U.S. 
companies entering the global marketplace that they were 
previously unaware of or even fearful of, and we see these 
companies being successful, and we hear from them day after 
day, time after time that most of them never would have 
considered it had it not been for the support and incentive 
from the Market Access Program.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hamilton follows:]

  Prepared Statement of Tim Hamilton, Executive Director, Food Export
     Association of the Midwest USA and Food Export USA--Northeast,
                              Chicago, IL
    Good morning, Mr. Chairman. My name is Tim Hamilton, and I am 
Executive Director of Food Export Association of the Midwest USA, known 
as Food Export--Midwest, and Food Export USA--Northeast, known as Food 
Export--Northeast. These are State Regional Trade Groups that offer 
services to help U.S. food and agricultural companies promote their 
products in foreign markets. We commend you, Mr. Chairman, and Members 
of the Committee, for holding this hearing to review our agricultural 
trade programs and wish to express our appreciation for this 
opportunity to share our views.
    The organizations I represent are associations of the 22 Midwestern 
and Northeastern state departments of agriculture. Like our 
counterparts in the Western and Southern regions, we work with our 
member agencies to increase the number of food and agricultural 
companies that export, as well as to help current exporters increase 
the volume and value of their export sales. We use funding from the 
Market Access Program (MAP) in a variety of ways to conduct outreach to 
these companies, to provide training, technical support and promotional 
funding to boost overseas sales by small U.S. producers and processors.
    We are also members of the Coalition to Promote U.S. Agricultural 
Exports--a broad-based coalition of over 150 organizations representing 
farmers and ranchers, fishermen and forest product producers, 
cooperatives, and small businesses.
    At a time when Congress is looking for ways to reduce government 
funding, we believe we can provide you compelling reasons to continue 
to fund programs, including the Market Access Program, that help 
maintain the ability of American agriculture to compete effectively in 
a highly competitive global marketplace in which many of our foreign 
competitors enjoy extensive financial support from their own 
governments.
    Our foreign competition would like nothing better than to see the 
U.S. reduce its support for agricultural exporters. That will enable 
them to more easily take over our market share. If we reduce support 
for the Market Access Program, we will watch our overseas market share 
erode. If that happens, we will be handing these sales, and the jobs 
they support, to our foreign competition. We can keep these jobs in the 
U.S., or we can stop promoting our U.S. exports and watch these jobs go 
overseas. Maintaining support for U.S. exports will help maintain and 
grow these jobs in the U.S. If we stop our investment, even for a short 
time, we will lose market share that will likely never be available to 
U.S. firms again.
    Food Export--Midwest and Northeast and our members focus almost 
exclusively on assisting small companies, also known as SMEs. Many of 
these firms are family owned. Most of them are food processors that use 
agricultural commodities as inputs, which they turn into finished goods 
for export. Their products vary from snack foods to convenience foods, 
pet food, beverages, gourmet products, food ingredients, natural and 
organic products, literally soup to nuts. What they all have in common 
is that they are made from U.S. agricultural products.
    These are companies that have been successful in the domestic 
market, often for generations, but in most cases they have never 
considered the export market. In many respects, our U.S. food market is 
a mature market. Food and agricultural producers are challenged to find 
growth opportunities here at home. At the same time, emerging markets 
overseas offer tremendous growth potential for these U.S. producers, if 
only our companies know about these opportunities and how to take 
advantage of them.
    With our state department of agriculture partners, we work hard to 
identify such firms that are not currently exporting, and encourage 
them to consider going international. Even among the firms who are 
already seeking an international outlet for the products, they are 
uncertain how to proceed. Small firms are often reluctant at first, 
unsure of how they might be successful doing business in another 
language, another currency, another culture. We provide education and 
training to help them identify where their best markets might be, and 
what hurdles they might need to overcome. We look at what channels 
might be appropriate, and consider issues like labeling or packaging 
concerns, tariffs, prohibited ingredients or related challenges.
    Once a small company is ready to begin exporting, their first 
challenge is to find customers--usually importers, distributors or 
supermarket buyers. We use MAP funds to prepare U.S. companies, and to 
arrange meetings for them with qualified international buyers. This 
might be done in the U.S. as part of a Buyers Mission, often at a major 
trade show, where we make arrangements for a number of U.S. suppliers 
to meet with foreign buyers. It might be done overseas as part of a 
Trade Mission, where U.S. companies meet importers of products like 
theirs. We support more than two dozen such events each year.
    I'd like to offer a few examples of how MAP has benefited specific 
small firms. Dutch Farms is a small, fourth-generation family-owned 
firm located in Illinois. They participated in a mission in which we 
used MAP funds to sponsor key buyers to travel to the U.S. At the 
mission, Dutch Farms had the chance to meet a buyer from China, who 
ordered a test-shipment of 2,500 lbs. of Dutch Farms' cheese. The firm 
expects this to grow to a monthly shipment of 40,000 pounds, valued at 
$100,000 per month. MAP funding made that possible.
    Churchies is a small specialty food company based in Malvern, 
Pennsylvania. Their participation in one of our trade missions to 
Canada introduced them to a broker that became their first 
international customer ever.
    Many international sales contacts are made at trade shows. Food 
Export--Midwest and Northeast support companies with advance 
preparation and technical support to make sure that these shows are 
successful for them. For example, we ensure that they are well prepared 
with appropriate pricing, and that their materials are translated if 
necessary. We make sure they have the necessary information about the 
market for their products, and what potential restrictions or 
competition they might face. We also work to make sure U.S. firms meet 
the right foreign customers at the show. By preparing them ahead of 
time, and offering some technical support at the show, we significantly 
improve their chances for success.
    Food Export--Northeast provided technical support and introductions 
to buyers at a trade show in Singapore for Sweet Street Desserts, a 
Pennsylvania based family-owned bakery products company. MAP funding 
provided the support they needed, resulting in the small company 
meeting more than 100 new buyers. Soon after, they shipped their first 
container of frozen bakery products to Singapore, and have begun 
discussions with potential customers in other Asian countries. Again, 
MAP funding made that possible.
    Another family owned company, this one from Missouri, Diamond Pet 
Foods used our support which was made possible with MAP funding, to 
participate at the Interzoo trade show. With that support, they 
identified customers from India, Australia, the UAE and Qatar, selling 
a half million dollars in pet food in the first year. These sales help 
Diamond Pet to remain a stable and growing employer in the small town 
of Meta, Missouri, as well as a good customer for the agricultural 
producers in the area.
    Once companies have become established in a market, it isn't enough 
just to have a customer. Like in the U.S., it is essential that they 
promote those products in these competitive markets. Fortunately, we 
are able to offer some limited promotional support to help these SMEs 
get their products established. This support includes advertising, 
demonstrations, trade show costs, label modifications, etc. These 
promotional services are made possible through MAP funding, and are 
provided on a cost-share basis, with companies investing at least 50% 
of the overall costs. This support is available to the companies for 
only a limited period of time in any given market: Once their product 
is established, then it is up to the company to fund its own expenses.
    This type of promotional support allowed Preston Farms, an Indiana 
popcorn supplier, to attend a major trade show in Shanghai, China that 
they would not have considered otherwise. Their exhibit led to the 
company's first ever sale of popcorn in China.
    According to the company, new export sales have a direct impact on 
their local economy as the firm contracts additional popcorn acreage 
from more area farmers.
    The Cabot Creamery in Cabot, Vermont was able to use MAP-supported 
funding to translate the labels on their specialty cheeses from English 
to Spanish. This allowed the firm to begin exporting to Mexico for the 
first time. Because Cabot is a farmer-owned cooperative, these new 
export sales support their producer members located in Vermont and New 
York. MAP funding made this possible.
    During the past year, with support from MAP, Food Export--Midwest 
and Northeast have assisted 1,186 different firms. These companies 
reported that they were introduced to more than 18,000 potential new 
customers because of that support. Further, these firms went on to make 
their first sale in a new country 642 times. At least 51 of these 
companies made their first export sale ever this past year. They 
reported more than $1.2 billion in new export sales, and project nearly 
double that in additional sales over the next year. During 2010. these 
companies reported that they have specifically added 964 new jobs 
because of this program. Based on our data. we estimate that total new 
export sales by these firms support nearly 9,736 new or existing jobs.
    While the MAP program clearly supports agricultural producers in 
rural areas, many companies that process these products for export are 
located in urban areas.
    For example: Bassetts Ice Cream calls itself the oldest ice cream 
company in America. The family-owned firm has been making ice cream in 
and around Philadelphia for 150 years, using milk and other ingredients 
from the local area. With promotional support made possible by the MAP 
program, the firm began selling their ice cream in China in 2008. Over 
the past three years, their sales have grown from $50,000 the first 
year to $800,000 in 2010. The firm expects this to nearly double, to 
$1.5 million, in 2011. According to the firm's international sales 
team, without this support the firm likely would not have any sales in 
China right now.
    Many of the jobs that are supported by agricultural exports are 
intrinsically U.S. jobs. They cannot be out-sourced overseas. They are 
tied to farm production in the U.S. The products are grown here, and 
they are processed here. If we are able to maintain our overseas 
markets, then these jobs will be held by Americans. If we lose these 
overseas markets, then we risk losing these jobs to our competitors in 
China, Europe and elsewhere.
    In our work with international customers, we are constantly 
reminded of the extensive support that our competitor nations are able 
to offer our customers. Buyers enjoy lavish treatment made possible by 
support from European or other governments. You can attend just about 
any major international trade show, where you will see spectacular 
national exhibits by China, Europe, Chile and many of our other 
competitors. Even small countries like Taiwan and the Netherlands mount 
grand displays, in stark contrast to the U.S. exhibit that is usually 
modest and spare.
    The Market Access Program acts to encourage investment by the 
private sector. It gives incentives for companies to invest in new 
markets that they might not otherwise consider. The companies that 
participated in our programs invested an average of $2.67 for each 
dollar in public support. But the international market has additional 
risks, and the length of time it takes to become successful is longer 
than for domestic sales. These risks make exporting particularly 
challenging for small companies. That is why 94% of small U.S. 
companies do not currently export, and it is why they need 
encouragement, incentive and support to undertake the process.
    Small businesses support half of the jobs in the U.S. So 
encouraging these small companies to begin or expand exporting has a 
double benefit. It supports not only the farmers that produce the 
commodities. It also helps support the jobs in these companies that 
process these products into finished goods for export--both in rural 
and urban areas. USDA estimates that each billion dollars of exports 
supports 8,400 jobs.
    It is really in our country's long term best interest to continue 
efforts to build our exports. For the U.S. economy to grow, not just 
out of this recession, but to continue to be competitive, we need to 
produce products that the world wants to buy. U.S. food and 
agricultural products are recognized around the world for being safe, 
high quality and innovative. This is a real opportunity for our 
country.
    Every day, we see small U.S. companies entering that global 
marketplace that they were previously unaware of, or fearful of. And we 
see these companies being successful--and being innovative. Customizing 
their products and finding new customers in markets where they never 
thought they could. And we hear from them day after day, that most of 
them would not have done it without the support and incentive made 
possible from the MAP program.
    Our nation's exports of food and agricultural products can continue 
to be a major success story in these otherwise difficult economic 
times. This is not the time to cut back on these efforts. It is a 
chance to take advantage of these global opportunities, and provide the 
support and incentive that companies, including small companies, need 
to pursue these markets, build sales, and put Americans to work.
    Mr. Chairman and Members of the Committee, I encourage you to 
support efforts that continue to boost America's food and agricultural 
exports, including MAP, that support our farmers, our small businesses, 
and the Americans that produce these outstanding products.
    Thank you.

    The Chairman. Thank you, and the panel's comments will 
conclude with Mr. Nikolich.

         STATEMENT OF GEORGE NIKOLICH, VICE PRESIDENT,
  TECHNICAL OPERATIONS, GERAWAN FARMING, INC.; BOARD MEMBER, 
       CALIFORNIA GRAPE & TREE FRUIT LEAGUE, REEDLEY, CA

    Mr. Nikolich. Thank you, Mr. Chairman. I appreciate the 
opportunity to speak to you today about market development 
programs. Today my focus will be on the Technical Assistance 
Specialty Crops program, TASC program, which our stone fruit 
industry has used to great effect to overcome many of the 
increasing challenges of technical trade barriers, and in the 
interest of time I will summarize my comments by providing a 
couple of examples, a couple of key examples for our stone 
fruit industry that has utilized the TASC funding for their 
success.
    Minimum residue limits are limits on chemical residues that 
our trading partners apply to products that we export. Foreign 
export regulations, they change quickly, and often their 
information is inconsistent from one source to another. We have 
used TASC funding to develop a quick and easy-to-access 
database to enhance uninterrupted trade and beyond stone fruit, 
TASC funding has also been used to support the development and 
maintenance of USDA/U.S. EPA MRL database for maximum chemical 
residue standards involving hundreds of specialty crops.
    Also in regards to maximum residue limits, one of the 
issues we are often faced with is that our industry does a 
wonderful job developing new chemistry, new crop protection 
materials that can be used which are safer, more effective, but 
if an MRL does not exist for those products, then we are unable 
to export. TASC funds have also supported industry 
representatives participating in discussions with U.S. and 
foreign regulatory agencies, markets such as Taiwan, Japan, and 
Canada, and it is critical in order to satisfy our needs for 
phytosanitary quarantine treatments to use the most effective 
materials possible. It is critical to have a continuing 
effective dialogue with those export markets so that we can be 
fast on our feet and make use of those superior products as 
soon as they are available to us.
    Also, a real success for our industry and for our company 
specifically has been the Mexico export program. California 
growers have been exporting stone fruit to Mexico under a U.S., 
Mexico bilateral work plan since 1994. Over 26 million boxes of 
California stone fruit have been shipped to Mexico since that 
time.
    The program involves both a fumigation or non-fumigation 
systems approach protocol. The systems approach protocol is one 
in which the Mexican Government has boots on the ground, they 
have supervisors overseeing their process. Costs have been 
close to $\1/2\ million over recent years, and TASC funds have 
served to defray some of the costs to industry for that.
    In addition, support through TASC funding has allowed our 
producers to work towards developing alternatives to chemical 
means for phytosanitary quarantine treatments. This is 
particularly important to our industry in that, for instance, 
methyl bromide is a very effective quarantine treatment, 
however, if you start with a good-eating piece of fruit, you 
treat it with methyl bromide, you wind up with a piece of fruit 
that is okay, and the difference between the market for a great 
tasting piece of fruit and an okay piece of fruit is virtually 
the same as having a strong market or no market at all.
    Without the assistance of TASC funds our trade 
organizations and industry could not have undertaken these 
types of activities, nor could we have shipped over 25 percent 
of our volume to our 16 export partners.
    Thank you, again, for the opportunity to discuss these 
matters.
    [The prepared statement of Mr. Nikolich follows:]

    Prepared Statement of George Nikolich, Vice President, Technical
  Operations, Gerawan Farming, Inc.; Board Member, California Grape & 
                     Tree Fruit League, Reedley, CA
     Chairman Johnson and Members of the Committee, thank you for the 
opportunity to provide testimony in this hearing to review market 
promotion programs and their effectiveness on expanding exports of U.S. 
agricultural products.
    Technical trade barriers represent an important, increasing, and in 
many cases, complex challenge faced by U.S. exporters of agricultural 
products. USDA's Technical Assistance for Specialty Crops (TASC) 
program is relied upon by U.S. organizations and businesses to provide 
funding for projects that address sanitary, phytosanitary, and 
technical barriers that prohibit or threaten the export of U.S. 
specialty crops.
    The following are examples of the positive impact TASC funding has 
had in supporting growers', shippers' and commodity representatives' 
efforts to address continuing and new non-tariff barriers to trade:

   Foreign regulations change with speed and frequency. 
        Additionally, information from one source sometimes contradicts 
        information from other sources. TASC funding has assisted 
        companies such as Gerawan Farming, Inc. and other stone fruit 
        producers with the ability to obtain the market intelligence 
        necessary for meeting import requirements. The stone fruit 
        industry developed an export database with the support of TASC 
        funds that identifies export requirements for growers, such as 
        labeling documentation, phytosanitary requirements, tariffs and 
        taxes, and sanitary requirements, such as chemical residue 
        levels, for all major stone fruit export markets. Quick access 
        to accurate export requirements through this database helps to 
        facilitate uninterrupted trade. Beyond stone fruit, TASC 
        funding has also been used to support the development and 
        maintenance of the USDA/U.S. EPA MRL database that tracks and 
        compares U.S. and international chemical residue standards on 
        hundreds of specialty crops.

   A primary concern for U.S. growers and shippers when 
        implementing integrated pest management programs is ensuring 
        that any residues resulting from applications of crop 
        protection materials meet both U.S. and international 
        standards. This can be challenging as standards often differ by 
        country and more international governments are insisting upon 
        their own unique set of standards. As this trend continues to 
        grow, fresh market commodities such as stone fruit face 
        challenges in managing insect and disease control to meet 
        export phytosanitary requirements while also observing the 
        differing regulatory requirements for residues within foreign 
        market destinations. U.S. growers consider maximum residue 
        level (MRL) harmonization as one of the most important and 
        growing issues within international agricultural trade. TASC 
        funds have been utilized to allow industry representatives to 
        participate in discussions between U.S. and foreign regulatory 
        agencies from key export markets such as Taiwan, Japan and 
        Canada. These discussions help the industry to develop a better 
        understanding of food standards within foreign markets with the 
        goal of ensuring that science-based MRLs continue to be 
        established so that growers may freely export produce.

   California growers have been exporting stone fruit to Mexico 
        under the U.S.-Mexico bilateral work plan agreements since 
        1994. During this period, over 26 million boxes of California 
        stone fruit have been exported to Mexico under either a 
        fumigation or ``systems approach'' (non-fumigation) protocol. 
        Since the inception of this program, the Mexican government has 
        required that their plant quarantine officials ``supervise'' 
        the activities of the program's participants, USDA's Animal 
        Plant Health Inspection Service (APHIS), and California 
        Department of Food and Agriculture (CDFA) or county regulatory 
        officials in California. The annual cost to industry for the 
        required Mexican monitoring program has grown to over $470,000 
        in recent years. These costs are charged back to the packing 
        companies, such as Gerawan Farming, participating in each 
        year's program. TASC funds have helped to defray some of the 
        costs of Mexican oversight while the industry continues to work 
        with USDA/APHIS, USDA's Foreign Agricultural Service (FAS), and 
        other government offices as necessary to negotiate an end to 
        Mexico's excessive oversight and regulatory requirements. This 
        funding will help ensure the long-term viability of the export 
        program for all California shippers which is extremely 
        important not only because the Mexican market is of great value 
        in and of itself, but also because it represents significant 
        demand that helps stabilize all other markets, including 
        domestic. Without Federal funding, it is likely that the costs 
        of Mexican oversight in California would prohibit many 
        California shippers, particularly the smaller companies, from 
        participating in this program.

   Support through TASC funding has allowed our producers to 
        work towards developing alternative chemical and non-chemical 
        treatments to replace methyl bromide fumigation as a quarantine 
        measure. This research has helped meet quarantine needs within 
        export markets and reduce the post-harvest losses caused by 
        pathogens, insects and some post-harvest treatments themselves. 
        Funds have provided stone fruit growers with the ability to 
        satisfy the quarantine concerns within a number of markets, 
        such as Australia, Mexico, Canada and Colombia.

   Without the assistance of Federal funding provided under the 
        TASC program, participating organizations such as Gerawan 
        Farming, Inc. would be unable to undertake these types of 
        activities and could not develop the necessary data to assist 
        USDA in negotiating reduced mitigation protocols to maintain or 
        expand U.S. agricultural product exports. Without TASC, our 
        industry could not have shipped the over ten million packages 
        representing 20% of our volume to our export partners last 
        year.

    Because of its variety and clear superiority, the U.S. specialty 
crop sector is one of the most vibrant components of U.S. agricultural 
trade. The TASC program and other programs discussed today are vital to 
maintaining the sector's access to export markets and its global 
competitiveness.
    Again, thank you for the opportunity to provide the Committee with 
testimony on the benefits of market promotion programs and their 
effectiveness on expanding exports of U.S. agricultural products.

    The Chairman. Thank you to all the panelists, and in the 
interest of efficiency I would like to defer now to the Ranking 
Member, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman. Let me 
quickly go through a couple of the different witnesses.
    Mr. Wootton, I want to ask the same question to you that I 
asked earlier to Mr. Brewer, and that is I believe that the 
Market Access Program for agriculture across the country has 
had tremendous benefits, and you cited that in your testimony. 
You also were very clear to let people understand that while 
Sunkist is a well-known, popular brand name, it is an 
organization that for over 100 years represents over 4,000 
growers in which the average size of an orchard of citrus is 40 
acres. And with all due deference to my friends in Florida, 
California now and has been for a little bit, the number one 
citrus state in the nation.
    The Market Access Program: Is this corporate welfare?
    Mr. Wootton. No, Congressman, it is not, and we object to 
that mischaracterization which some organizations I know said 
that before the Government Reform and Oversight Committee 
hearing within the last 2 weeks and cited that a number of 
major corporations, for profit corporations were the 
beneficiaries of MAP funds. It was completely untrue.
    Congress in 1995 reestablished new eligibility requirements 
for participation in MAP, and as Mr. Brewer outlined, these are 
not-for-profit U.S. agricultural trade associations, not-for-
profit cooperatives, State Regional Trade Groups, and the 
beneficiaries are small business enterprises and small farmers.
    So this is certainly not corporate welfare.
    Mr. Costa. Thank you very much. Mr. Nikolich, thank you for 
coming all the way from California. You did a good job in 
explaining how your efforts and with Gerawan Farms have done in 
using the Technical Assistance for Specialty Crop Program.
    For newer Members here on the Committee, we deal with this 
regularly, but could you explain the challenges that we face 
with sanitary and phytosanitary standards, technical barriers 
that can be non-tariff trade barriers that we deal with on 
specialty crops compared with other agricultural products, even 
with countries that we have an agreement with like NAFTA?
    Mr. Nikolich. You are referring to for lack of a better 
term, non-scientific-based barriers?
    Mr. Costa. Yes. Non-tariff barriers.
    Mr. Nikolich. Every year we are always waiting for the 
other shoe to drop, invasive pest species or a major concern to 
us in California. We have a number of countries who have 
imposed barriers to trade based on phytosanitary conditions 
that may or may not have much to do with science. There are 
pest species that we have at great cost to our industry, 
developed phytosanitary quarantine treatments, and those 
regulations are often considered to be unnecessarily complex 
and rigorous. And it has been a real challenge, not only in 
developing the science necessary to do quarantine treatments 
but to also overcome the fact that it is a moving target, and 
it is very difficult to attempt to keep up with the changes.
    Mr. Costa. Before my time expires here, could you give an 
example on the TASC, what kind of market intelligence you have 
been able to gain in terms of marketing your products abroad 
and how it has impacted? And also, as we look at the 
reauthorization of the farm bill, what changes you might 
recommend we make in TASC.
    Mr. Nikolich. The primary benefit that we have had through 
the TASC funding has been to work directly with our export 
partners to understand their needs. For instance, food safety 
may be a number one concern in the U.S. but really chemical 
residues are number one interest to most of our export 
partners. So developing a personal relationship with our export 
partners facilitated through the meetings and the dialogue and 
the systems that have been supported through TASC funding has 
been of great importance to stay in touch and to understand the 
changes and the needs of our customers.
    In terms of recommended changes to TASC funding or 
additions, for instance, as was noted earlier, table grapes has 
a pre-clearance program. There is a great need for a similar 
program in stone fruit, and we would also like to rely more on 
USDA, our own California Department of Food and Agriculture and 
agricultural commissioners' offices for oversight rather than 
have to go to the expense of funding our export partners' 
representatives here on our soil.
    Mr. Costa. You know, sometimes I hate when we use acronyms 
in government, and by the same token as farmers sometimes with 
the wonderful variety of crops we grow around the country, we 
tend to take terms for granted, but it is important for those 
people who don't grow stone fruit in other parts of the country 
that we explain what category of fruits that we include in 
stone fruit.
    Mr. Nikolich. You are right. Stone fruit, everything from 
apricots, peaches, plums, nectarines, pluots, plumcots. There 
is a variety and also cherries are considered stone fruit, 
anything with a pit that you need to throw out is a stone 
fruit.
    Mr. Costa. It is a stone fruit. I was reminded of that by 
my colleague from Illinois, and we use that term 
interchangeably, and I knew most of the listing, but I knew I 
would leave out pluots.
    Mr. Nikolich. Pluots, plumcots. They are inter-specific 
hybrids of apricots, plums.
    Mr. Costa. Thank you.
    The Chairman. The gentleman from Pennsylvania, Mr. 
Thompson.
    Mr. Thompson. All right. Well, I appreciate Mr. Costa 
seeking that for those of us who have been sitting here 
wondering what a stone fruit was. I love learning something 
new.
    Mr. Costa. And afraid to ask.
    Mr. Thompson. Afraid to ask. That is right. I figured it 
had to be round.
    You know, this past 2009, the American dairy prices dropped 
to unprecedented lows. I think nationwide our dairy farmers 
were losing at that point certainly in my district, and around 
the country, an average of $100 per cow per month. It is 
generally accepted that a decrease in exporting was a major 
factor of these low prices.
    Now, a number of steps were subsequently taken by USDA, 
including the activation of the Dairy Export Incentive Program, 
which appears to be somewhat helpful.
    Mr. Hamilton, I know in your testimony you referenced the 
organization you work with and the types of those you are 
representing today, I saw reference to Vermont creamery and ice 
cream that was being exported to China. I wanted to seek your 
thoughts of have the measures that USDA has been doing, are 
they helpful, and what else can we do to increase our dairy 
exports?
    Mr. Hamilton. Thank you for that question. My expertise is 
less on dairy policy than it is on the process of helping small 
companies export their finished goods, which is why you saw in 
my written testimony the examples of the ice cream and the 
cheese products.
    So from the perspective that we look at, we are helping 
companies that generally have branded products that they are 
trying to educate their foreign consumers about the value of 
that brand as a U.S. product. So, the area that we are 
supporting them is at the higher end in terms of the value-
added product rather than just the commodities.
    In terms of the dairy policy that affects commodities, I 
would have to defer to my colleagues from the Dairy Export 
Council, who unfortunately aren't here this morning.
    Mr. Thompson. Sure. Some of those, the ones that are 
exporting those final finished products, is there anything that 
stands out in your mind of just best practices, the ones that 
have been very successful? What are they doing that others are 
not to be successful at penetrating those foreign markets?
    Mr. Hamilton. The really critical component for everyone is 
really to find out what your customer is interested in, and so 
that really varies by market and by product. We were talking 
yesterday with a small company that wants to export yogurt, and 
the challenge is what flavors do they want in a particular 
country. Yogurt presents its own challenges because of the 
bacteria that it normally and rightfully has, and there is also 
a lot of protectionism against dairy. If you have a small 
company that wants to export their dairy products to Canada, 
which is a natural first market for them, it is a big 
challenge. So they really need to look at the taste and the 
preferences of the consumer.
    Mexicans, for example, prefer soft cheese and light cheese 
over hard cheese. So if you go to Mexico and try to sell a hard 
yellow cheese, you are going to have a lot harder time than if 
you have gone down, done your market research, and figured out 
exactly what it is that the customers are looking for. And once 
you have done that and can then customize your product, your 
label, your packaging, then you stand to be a lot more 
successful.
    Mr. Thompson. Great. Thank you. Mr. Wootton, the 
President's National Export Initiative identified small and 
medium-sized businesses, referred to as SMEs, as a key focus 
group on which to double our exports, U.S. exports.
    Of your members those of similar cooperatives and other 
entities from which you are familiar throughout the agriculture 
industry, how many would you say would already qualify as an 
SME?
    Mr. Wootton. Congressman, I would say virtually all of our 
membership would be SMEs. I mean, by definition of Small 
Business Administration it is under a certain number of 
employees that work for that company, and in the case of our 
cooperative itself, Sunkist itself, we ourselves would qualify 
as a small medium enterprise.
    So we have slightly over 300 employees worldwide for 
Sunkist. We have a very well-known name, but we are a small 
organization, and our ownership of 4,000 citrus growers are 
themselves very small family farmers.
    Mr. Thompson. Do you feel that there is a need to refocus 
the MAP or the FMD Programs towards SMEs?
    Mr. Wootton. No. I think the SME objective of the Foreign 
Agricultural Service is already being accomplished, and perhaps 
they were unaware of who the constituencies were that were 
benefiting from these programs. I mean, in the case of these 
programs they are essentially the small farmers, small to 
medium enterprises, small businesses that are participants 
either through their cooperatives or through the regional, 
state and regional trading organizations.
    Mr. Thompson. Thank you. Thank you, gentlemen, for your 
testimony.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman from Vermont, Mr. Welch.
    Mr. Welch. Thank you very much, Mr. Chairman.
    You know, it is tremendous what the promotion program does 
because we have to sell more ag products, and for those of us 
who are supporters of that effort, I think we have the biggest 
responsibility to try to improve it and identify areas where it 
needs improvement and correction.
    So what I would like to do is have each of you just very 
quickly tell us the two things that you would do to improve the 
effort that we need to make, and I will start with you, Mr. 
Wootton.
    Mr. Wootton. The effort that we ourselves need to make or 
the effort that USDA would need to make in order to----
    Mr. Welch. Well, give me a one and one. I mean, the goal 
here has to be to promote and sell, successfully, more of our 
ag products.
    Mr. Wootton. Right.
    Mr. Welch. Now, if you have a special way to do it with 
dairy, I am always interested, but, seriously, the issue for us 
is who promotes it, we have a bigger responsibility than anyone 
else to improve it so that it doesn't become subject to this 
attack, a global attack that is, ``corporate welfare.'' This is 
about growing our economy and making agriculture thrive across 
the country.
    So I am interested in your two points.
    Mr. Wootton. From the industry perspective, I mean, it is 
the industry's obligation to best know their own markets and 
where they have the opportunities to export and sell those 
products. That is not a role for the government.
    Mr. Welch. Right.
    Mr. Wootton. And so, it is up to us to identify those 
markets and try to compete effectively there. For an 
organization like Sunkist our greatest asset is our brand, and 
that is a huge tool for us to be able to establish a 
relationship with customers and consumers in those markets.
    Mr. Welch. Right. Okay. Let me go to Mr. Censky. I am not 
going to have a lot of time. Thank you.
    Mr. Censky. I would say one of the key things that I think 
is important on both the Foreign Market Development Program and 
the Market Access Program is that there are the requirements 
for evaluation. We as participants are constantly evaluating 
activities, our activities, finding out if they were 
successful, how we can change them to improve them in the 
future, are we moving the needle in the markets, and that is 
one of the key requirements.
    Mr. Welch. And do you think we are self-critical enough in 
that review?
    Mr. Censky. I think we are, and we do bring in outside 
evaluators as well, so it is not just our staff that are 
looking at our own programs.
    Mr. Welch. Right.
    Mr. Censky. We are bringing in outside evaluators.
    Mr. Welch. Thank you. Mr. Lively.
    Mr. Lively. Yes. Thank you, sir. I would agree with Mr. 
Wootton in large regard. I think from the standpoint of the red 
meat industry, which I represent, the clear trend is towards 
more branded products.
    Mr. Welch. Yes.
    Mr. Lively. You know, historically it was basically a 
commodity business, but that is changing. You see it here at 
home, and you especially see it in overseas markets. The truth 
is the branded guidelines that exist today under MAP make it 
difficult for us to support introducing some of those brands 
into the market, and to be clear, I am not talking about the 
government using taxpayers' money to support brands of 
humungous companies.
    Mr. Welch. No.
    Mr. Lively. But for smaller companies, and there are an 
awful lot of small specialized meat companies that we think 
could do very well in the export market, with a little more 
streamlining in the way the branded program offers.
    Mr. Welch. Well, I would be interested in that. You know, 
Vermont, we focused on this branding and the Vermont brand, my 
local farmers tell me really helps them with sales. So we have 
to protect a brand and promote a brand. That makes a lot of 
sense.
    Mr. Hamilton.
    Mr. Hamilton. Sure. Two things. Number one, and this 
follows up on what Mr. Lively said. The USDA has been in the 
process for about 3 years of issuing new regulations that 
govern the MAP Program that we feel would make it much more 
accessible and much more applicable in today's market. The 
regulations that exist right now were written before electronic 
marketing became common.
    Mr. Welch. Right.
    Mr. Hamilton. And in the international marketplace that is 
extremely important now. So the issuance of those new 
regulations on the MAP Program would be number one.
    Number two I would say often lost in the conversation in 
terms of FAS's capabilities are their locally-engaged staff at 
their embassies around the world.
    Mr. Welch. Right.
    Mr. Hamilton. You hear often about the Foreign Service 
officers, but there is a tremendous amount of expertise on the 
local staff that are hired, that have the relationships with 
the industries.
    Mr. Welch. Let me stop you there. That is a good point. I 
just have a little time. I wanted to let Mr. Nikolich speak, 
too. Thank you for that.
    Mr. Nikolich. Number one, harmonize MRLs, maximum residue 
limits, so that everybody is on the same page and that they are 
science based, so that they make sense.
    Number two would be flavor sells. Phytosanitary quarantine 
treatments are difficult to issue, to contend with. Some of 
those treatments diminish the flavor and quality of our stone 
fruit, and to the extent that research can be done to improve 
that situation the better off industry will be.
    Mr. Welch. Thank you. I yield back.
    The Chairman. Thank you. The gentleman from Indiana, Mr. 
Stutzman.
    Mr. Stutzman. Thank you, Mr. Chairman. My question is for 
Mr. Lively. After the BSE incident the beef market took a huge 
hit. While beef exports have finally rebounded a little since 
then in over $4 billion in 2010, it is only 84 percent of 2003 
levels.
    How important has USDA's Emerging Markets Program been to 
restoring market access lost due to the BSE-related import 
restrictions?
    Mr. Lively. Thank you, Congressman. Yes. We did achieve 
this year for the first time since the BSE problem emerged in 
2003, the value of exports that we had that year, but as you 
point out, the volume still falls short of our 2003 level.
    In my opinion as I touched on in my testimony, and the EMP 
Program was critical to our ability to respond to this problem 
in emerging markets, of course, which excludes markets like 
Japan and Korea and Taiwan. We have used Emerging Markets funds 
to support bringing, as I mentioned, officials from countries 
like Mexico, the Philippines, Egypt, et cetera, to the U.S. 
Fundamental to getting past where we are today or where we were 
at least then on the BSE problem is convincing governments that 
we do have the controls in place, and frankly in many cases 
bringing them up to speed on the science of BSE and the science 
of risk assessment.
    So countries reacted quickly to that crisis, they took 
positions, which became policies, which became very difficult 
to change. So over time this educational effort, this, if you 
will, capacity-building effort with foreign officials has been 
critical. We are now back in specifically in two of the 
emerging markets that I mentioned in Egypt and the Philippines. 
We now have restored complete access for U.S. beef. So we do 
consider that a victory. We still have a long way to go in some 
other places.
    Mr. Stutzman. Mr. Censky, in your testimony you mentioned 
how much the EU is spending on export promotion. Given the 
large amount of money our competitors spend on their own 
exports, how important do you believe the partnership is 
between FSA and our small and medium-sized agribusinesses, and 
are we getting the value for the dollar spent?
    Mr. Censky. I think we are. It is, number one, it is 
extremely important, and we are getting the value. The 
government funding is actually attracting more dollars. In the 
case of the soybean industry ourselves, we are investing $2 for 
every dollar in funding that we receive under those programs, 
and so definitely we are expending our own resources and want 
to make sure that it is as effective as possible and that we 
are moving the needle.
    And we definitely, I mean, just the fact that we have moved 
from just soybeans, being a relatively minor commodity 40, 50 
years ago, to where we are today at over $23 billion in exports 
shows the importance of foreign market development.
    Mr. Stutzman. In the last 2 minutes here and each of you 
could answer this briefly, are you seeing new interest from 
producers to export products? You know, a lot of times we look 
within our own small world sometimes, but is there new 
interest? Is there the demand that is there that people are 
producing more, and they are saying, well, where can we start 
marketing our products and approaching you all?
    You had mentioned a yogurt facility. Are there other 
sectors that are starting to grow? Obviously, with beef we have 
a long way to go, and we know our possibilities there, but any 
new emerging markets?
    Mr. Hamilton. I guess what I would say to this because this 
is our day-to-day challenge is how do we convince small 
companies that they should be exporting. Only about 94 percent 
of U.S. companies don't export. The challenge isn't just 
economic. It is cultural. We as a country are not known for our 
exporting capabilities among small companies. We have never 
really had to do that as an economy, and so since the President 
has come out with the National Export Initiative, that has 
created some more interest among people who are starting to 
think, oh, maybe this is something that could apply to me.
    And so, the important thing, at least in the small 
companies that we work with, is they need to hear from somebody 
with influence that this is possible. And so as you are out 
talking to people, I think it would behoove you, and it would 
certainly help us if they were hearing from people that this is 
something that small companies can be successful at.
    Mr. Stutzman. Absolutely. I agree, and I actually just came 
back from a trip to the Middle East, and there is opportunities 
in Saudi Arabia and other emerging markets. That is one of the 
jobs I feel is to go back home and let folks know that there is 
opportunity there, and I know especially with agriculture we 
are feeding the world and have a lot of opportunities.
    So thank you for what you all do, and I appreciate you 
being here today. Mr. Chairman, I yield back.
    The Chairman. Thank you. I now call on the distinguished 
Ranking Member, Mr. Costa, for a couple questions.
    Mr. Costa. Thank you. Two questions.
    One to Mr. Lively. You have spent many years dealing with 
the beef industry across the country, the livestock industry. 
Can you give this Committee a sense of some of the challenges 
we face? I know you have spoken earlier.
    I mean, we do such a great job, in terms of not just 
industry standards, but health and safety. I have three packing 
plant operations in my district. Obviously, we have a little 
issue with CHPSA right now, but the BSE as you referred to it 
and the concerns about mad cow disease and others, and we have 
penetrated Japanese and South Korean markets and other Asian 
market as well. We have competitors obviously with Australia 
and South America.
    But some of these issues that are raised by these 
countries, where we find good customers for, they fall under 
the category, I guess, of non-tariff trade barriers because 
what happens is is, for example, the bone end found in South 
Korea a year and a half ago. How do we deal with this? How do 
we cut through the fact that these folks are simply being 
protectionists?
    Mr. Lively. You know, you raise an excellent point, 
Congressman, and it is key to our ability to succeed without a 
doubt in exporting both beef and pork. The BSE episode has 
taught us all a lot of lessons, I guess I would say, but one of 
those is that we have to be consistent, we have to be diligent 
in the way we approach these countries. We have to remember 
that once countries close their doors, we are there knocking on 
the door trying to get back in. Whether they are what we have 
all seen, and we could all say this on this panel, whether 
there is science to back up the position that the country's 
taking or not, they are in control. I mean, they are the ones 
who make the decisions.
    I think we are going to have to stay on these issues and 
truthfully, as a country we are going to have to be consistent 
in the way we apply these rules. When we approach other 
countries and criticize them for their non-science-based 
positions and then sometimes in our case our position, too, is 
less than consistent. That makes it difficult.
    Mr. Costa. I think the trucking issue earlier referenced 
was a good example of that. I think in that case we were wrong. 
I mean, we weren't complying.
    My last question, Mr. Nikolich, I think you have done a 
good job of explaining the various challenges that we have in a 
lot of specialty crop areas, including stone fruit, and you 
talked about the minimum residue levels that sometimes are 
raised on these phytosanitary issues and trying to be 
consistent.
    I would like you to just explain to the Committee, though, 
and you referenced it in fumigants, both in fumigants and 
treatment of fruit products for export purposes but also the 
impact for soil fumigants and the challenges we are having 
right now in terms of the registration and finding 
alternatives. Because obviously a good tasting fruit is what 
you need to sell, and I promised the Chairman here that I would 
provide him some good tasting stone fruit here as the season 
comes upon us.
    But the fumigant issue still is a real problem.
    Mr. Nikolich. It certainly is. Methyl bromide has 
advantages in that it is very effective on a target pest, and 
it also disappears, so residues of methyl bromide on exported 
fruit really are not the issue. And so we need to have 
reasonable science-based approach to the use of fumigants. 
There is an awful lot of pressure on our industry in terms of 
the use of pesticides in general, and there is an awful lot of 
folks that don't believe there is any manmade chemical that is 
any good for anyone, and so that is a real challenge to 
overcome.
    Whether it be soil fumigants, quarantine treatments, we 
really do need to have a science-based reasonable approach. 
Science has really suffered in this enterprise in terms of the 
alternatives we have, and there is also the component there of 
negotiating with our export partners to allow certain practices 
and fundamental approaches to the way we do things in terms of 
phytosanitary and quarantine practices that I think could yield 
results if we could pursue those.
    Mr. Costa. Well, my time has expired. Mr. Chairman, I want 
to thank you for a good hearing. This is a continuing 
conversation that we must continue to have as it relates to 
risk assessment and risk management, realizing that everyone 
wants to ensure that we have the gold standard, and we apply it 
as it relates to both pesticides and herbicides, that these are 
necessary tools. The fact is we don't do as good a job as we 
should, I guess is what I am trying to say, in trying to 
explain the comparative risks of assessment for the risk 
management and the safety features that come from it. I mean, 
if people eat healthy diets, you have far less risk than from 
obesity and the other tradeoffs.
    But we will continue to do a good job with this 
Subcommittee, Mr. Chairman, and we appreciate your leadership.
    The Chairman. Thank you, Mr. Costa, and thank you to the 
panel. In absentia thanks to Mr. Brewer, to our respective 
staffs, and for the audience. I think this has been a very 
productive hearing which we intend to continue. I think it is 
safe to say that the agricultural sector is our superstar of 
exports, and we want to do everything we can to make sure that 
that continues and flourishes.
    This hearing of this Subcommittee is adjourned.
    [Whereupon, at 11:28 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
      
Submitted Letter by Berry Bedwell, President, California Grape and Tree 
                              Fruit League
April 14, 2011

Hon. Timothy V. Johnson,
Chairman,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
Agriculture, House Committee on Agriculture,
Washington, D.C.;

Hon. Jim Costa,
Ranking Minority Member,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
Agriculture, House Committee on Agriculture,
Washington, D.C.

Re: April 7th hearing to review market promotion programs and their 
effectiveness on expanding exports

    Dear Chairman Johnson and Ranking Member Costa:

    The California Grape & Tree Fruit League (League), is a public 
policy agricultural trade association representing the State of 
California table grape and deciduous tree fruit industries; our members 
produce fresh fruit throughout the state and include: Coachella Valley 
(table grapes), San Joaquin Valley (all commodities), Santa Clara 
County (cherries), Lake County (pears), as well as Mendocino, Yuba, 
Stanislaus, San Joaquin and Sacramento counties (pears, plums, 
cherries, kiwi, apricots). The League provides technical assistance and 
advocacy for the membership on a wide array of issues, including 
international trade, marketing regulations, product transportation, and 
packaging and labeling requirements.
    We appreciate our industry's opportunity to provide additional 
comments to the April 7th hearing record. Our industry utilizes 
programs such as the Market Access Program (MAP) and Technical 
Assistance for Specialty Crops (TASC) to supplement industry funding to 
establish and expand export markets for the California grape and tree 
fruit sector. We appreciate this opportunity to describe the positive 
impact that these programs have had on the League's members.
    One of the League's most important uses of Federal funding in 
recent years has been a TASC grant to offset the costs of Mexico's 
burdensome inspection program for California stone fruit. Mexico 
restricts the import of California stone fruit using an exaggerated 
quarantine pest list, onerous penalties for pest interceptions and 
protocol infractions, and by requiring excessive Mexican oversight of 
U.S. officials and the stone fruit industry in California. The 
introduction of new pests into California in the past few years, 
including light brown apple moth (LBAM) and European grapevine moth 
(EGVM), has resulted in increased oversight of the California stone 
fruit export program by Mexican officials.
    The costs for the inspection oversight that Mexico charges to the 
stone fruit industry have increased annually, pushing some smaller 
exporters out of the export program. To maintain the program and ensure 
related costs do not become prohibitive, the League has received TASC 
funding for technical assistance and to ensure participation fees do 
not become prohibitive for California stone fruit shippers. This has 
allowed small businesses to continue exporting to Mexico, and has 
prevented the U.S. from losing Mexico as a market while officials 
negotiate a more permanent solution to Mexico's import requirements.
    TASC funding has ensured that, despite the oversight program and a 
variety of other difficulties facing exporters, Mexico remains the 
second largest export market for the California tree fruit industry. 
California shippers exported two million cartons of stone fruit to this 
market in 2009, valued at $32.6 million. This is especially important 
as many shippers depend on the Mexican market to consume a size and 
quality component of annual production that is not easily marketed in 
the U.S. or in other export markets.
    Like TASC, MAP is also a vital component to the California grape 
and tree fruit industry's export success. Though the League does not 
directly receive MAP funding, our members frequently benefit from MAP 
activities through other industry associations that participate in the 
program. MAP has helped to establish California as one of the world's 
leading suppliers of high-quality grapes and tree fruit. According to 
the California Department of Agriculture (CDFA), California 
agricultural exports increased 66% from 2003 to 2009. Without the 
opportunities to open new markets offered by MAP, this type of growth 
would not be possible.
    Programs benefiting specialty crop exports are absolutely vital in 
this age of global agricultural competition. The small scope of U.S. 
export assistance programs pale in comparison to the subsidies and 
assistance provided by other major grape and tree fruit suppliers such 
as China, Brazil, India, and the European Union. Further, MAP, TASC, 
and other U.S. Department of Agriculture export development programs 
help U.S. agricultural producers confront and overcome many of the 
tariff and non-tariff barriers they face globally.
    MAP and TASC have consistently shown to be wise investments for the 
U.S. Government. Through increased exports and new employment 
opportunities, these programs pay back significant returns on the 
program outlays. The MAP and TASC programs are relatively small items 
in the federal budget, but they have an enormous positive impact on the 
livelihoods of many communities in California and across the country.
    Considering the importance of these programs to the League's 
members and U.S. agriculture in general, we respectfully ask that you 
continue to fund MAP, TASC, and other export assistance programs at 
their full authorized levels. This will help the grape and tree fruit 
industry to continue increasing exports and providing new employment 
opportunities.
    Thank you once again for this opportunity to comment.
            Sincerely,
            
            
Berry Bedwell,
President,
California Grape and Tree Fruit League.
                                 ______
                                 
 Submitted Statement by Susan Brauner, Director of Public Affairs, Blue
      Diamond Growers; Executive Member, Coalition to Promote U.S.
 Agricultural Exports; Member, National Council of Farmer Cooperatives
    Good morning, Mr. Chairman, Ranking Member Costa, and Members of 
the Subcommittee. My name is Susan Brauner. I am Director of Public 
Affairs for Blue Diamond Growers and an Executive Member of the 
Coalition to Promote U.S. Agricultural Exports and a member of the 
National Council of Farmer Cooperatives.
    On behalf of Blue Diamond's grower-members, and over two million 
farmers and ranchers who are members of farmer cooperatives, I am 
pleased to provide testimony about our vital export programs, and 
respectfully request that this statement be made part of the official 
hearing record.
    Blue Diamond Growers is a 100 year-old agricultural marketing 
cooperative owned and governed by over 3,000 California almond growers 
who average about 60 acres of almonds each. They market their brand 
under the Blue Diamond label to 95 countries worldwide. California 
almond growers produce 82 percent of the world supply, 100 percent of 
the U.S. supply of almonds and export 70 percent. A majority of the 
almonds exported are sold for further processing as an ingredient in 
other foods.
    Without Blue Diamond, members would not be able to pool their 
resources to market and process almonds successfully in the global 
market. Industry earnings from export sales are currently valued at 
over $2 billion. Cooperative growers receive their share of these 
earnings as patronage dividends which are spent in Northern California 
communities where the almonds are grown. In turn, over 20,000 jobs 
related to the almond export business are generated in California.
    The United States must continue policies and programs that allow 
American agriculture to compete in a global marketplace that is still 
governed by unfair foreign subsidies and market access restrictions. 
Unfortunately, U.S. branded products are at a disadvantage in foreign 
markets where a country's own brand dominates. In addition, almonds 
compete with foreign grown almonds and with other nuts that may be more 
accepted in the culture. In the European Union (EU), for example, 
almonds for snacking are accepted by approximately 4 percent of EU 
consumers on average. According to the WTO's most recent statistics, 
the EU is also providing $1.4 billion in advertising and marketing 
activities to support their agricultural sector. It is expected that 
the EU will increase this spending based on a recent EU resolution 
passed by Parliament. Two-thirds of U.S. almonds are exported to EU 
countries! EU funds spent on advertising their brands and products 
clearly put the U.S. at a competitive disadvantage.
    Currently funded at $200 million, down from a $325 million level, 
MAP is the only tool many in agriculture have that is accepted under 
WTO rules to counter unfair foreign trade practices. This current 
funding level has not changed in 10 years, and a strong case can be 
made that as more countries struggle to compete in the global 
marketplace, unfair trade practices are at an all-time high. The 
program is the most efficient, cost-share government program that 
requires one hundred percent matching funds by branded programs. In 
addition to the matching fund requirement, Blue Diamond funds its own 
research, export team and their travel, and all other expenses related 
to international trade. Participants can only be small business, 
nonprofit agricultural trade associations, nonprofit agricultural 
cooperatives and nonprofit state regional trade groups.
    A recent independent USDA-commissioned audit of MAP and other USDA 
trade programs prepared by HIS Global Insight, INC confirmed that MAP 
uses government funds to supplement, not replace, industry funds. 
According to the report, the increase in market development spending by 
government and industry from 2002-09 enlarged U.S. market share and 
increased the annual value of U.S. agricultural exports by $6.1 
billion. This equates to $35 in agricultural export gains for every 
additional $1 expended, a 35 to 1 return on investment!
    The report also showed that from 2002-09, export gains associated 
with the programs increased average annual farm cash receipts by $4.4 
billion and net cash farm income by $1.5 billion. It further confirmed 
that, due to higher prices from increased demand abroad, U.S. domestic 
farm support payments were reduced by roughly $54 million annually, 
thus reducing the net cost of these U.S. programs.
    Many of our competing countries are completing their own bilateral 
trade agreements and have committed to increasing their support of 
advertising and marketing activities. European countries, for example, 
are expanding their promotional activities in other regions including 
Asia, Latin America and Eastern Europe. Canada, Australia, New Zealand, 
Chile and Brazil have also invested in significant promotional 
activities worldwide.
    The almond industry has invested in MAP activities in India and 
China where market growth potential outranks all other regions. 
Shipments over the last five years have tripled to India and have 
nearly doubled over the same time period annually in China! These two 
markets alone are returning nearly $500 million back to rural 
communities in California on an annual basis!
    Returns on investments like these are tangible examples of how 
sound public policy and partnership with government can benefit 
Americans. To remain competitive, it is vital that programs like MAP 
continue in the 2012 Farm Bill and beyond. The current application 
process and oversight works well and should not be altered. Targeting 
funds to specific sectors is not a viable long-term policy for success 
in foreign markets.
    Thank you for this opportunity to provide comments to the Committee 
and for its leadership on U.S. agriculture exports. We ask for your 
support and recognition of the attributes and return on investment that 
the Market Access Program provides to our farmers and ranchers and to 
our rural communities in an increasingly competitive global 
marketplace.
                                 ______
                                 
       Submitted Letter by Guy P. Cotton, Grower Direct Marketing
April 15, 2011

Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
Agriculture, House Committee on Agriculture,
Washington, D.C.

    Dear Subcommittee Members,

    My name is Guy Cotton, and I serve as Managing Director of Grower 
Direct Marketing. As an exporter of California cherries that has close 
experience with the Market Access Program (MAP) and Technical 
Assistance for Specialty Crops (TASC), I appreciate this opportunity to 
provide my thoughts on their effectiveness. After witnessing the 
difference these programs have made in the California cherry industry, 
I am a firm believer that MAP and TASC merit your continued support.
    MAP and TASC funding are used by the California cherry industry 
through the California Cherry Advisory Board (CCAB). CCAB has used MAP 
funding very successfully to promote California cherry sales, 
especially in Asia. For example, cherry sales to Korea increased 22.5% 
by value to $17.4 million in 2010. Grower Direct Marketing contributed 
to this success, exporting $1,200,000 worth of cherries to Korea in 
2010. This increase is an obvious sign that the industry's message that 
California cherries are healthy and high-quality is resonating among 
Korean consumers. Without MAP funding, the significant expansion we 
have seen in the Korean market would be much more difficult.
    Similarly, MAP funding has contributed greatly to strong growth in 
the Japanese market. California cherry exports to Japan grew to $56.7 
million in 2010, an increase of 16.7% over 2009. Grower Direct 
Marketing exported 165,000 cartons of cherries worth approximately 
$6,600,000 to Japan. The successful retail promotions and advertising 
that have driven this growth are attributable to the combined effort of 
industry and MAP funding.
    The TASC program is also an important tool that can help the 
California cherry industry increase exports. As mentioned above, the 
introduction of new quarantine pests creates a challenging environment 
for exporting California cherries. TASC provides a way to quickly 
address technical trade barriers as an industry, resolving issues that 
would otherwise close a market. In this way, the TASC program is an 
important safety net for the California cherry industry. While the cost 
of most TASC projects is typically fairly low, they produce a 
significant impact by keeping markets open or enabling specialty crop 
producers to expand their exports to a market.
    MAP, TASC, and other agricultural programs are sometimes targeted 
for budget cuts by those that do not understand their value. However, 
my experience with MAP and TASC have shown that these provide benefits 
that far exceed the cost of the programs. Even considering only the 
increase in export value achieved through these programs, MAP and TASC 
have displayed an enviable return on investment. When the additional 
effects of improved pricing and employment growth are factored in, it 
is clear that these programs are very successful and provide an 
excellent return to U.S. taxpayers. For these reasons, Grower Direct 
Marketing strongly supports full funding for MAP and TASC programs. We 
respectfully request that you to do the same.
    Thank you.
            Sincerely,
            
            
Guy P. Cotton,
Grower Direct Marketing.
                                 ______
                                 
   Submitted Statement by Wallace L. Darneille, President and Chief 
        Executive Officer, Plains Cotton Cooperative Association
    Mr. Chairman and Members of the Subcommittee, I am writing on 
behalf of the 25,000 stockholders of Plains Cotton Cooperative 
Association (PCCA). I ask that this statement be included as part of 
the record for your April 7 hearing regarding market promotion and 
development programs administered by USDA's Foreign Agricultural 
Service (FAS). The success of the Market Access Program (MAP) and the 
Foreign Market Development (FMD) program is well documented, and I urge 
Congress and the Administration to maintain funding for these programs 
at the $200 million level as authorized by the 2008 Farm Bill.
    Exports of U.S. agricultural products facilitated by MAP and FMD 
play a key role in the U.S. economy and support 1.1 million American 
jobs. Agriculture's trade surplus also helps reduce the United States' 
overall trade deficit. Exports are vitally important to U.S. cotton 
producers including the farmer-owners of PCCA. Today, the United States 
exports more than 95 percent of its cotton as fiber, yarn or fabric. 
Without those export markets, the U.S. cotton industry would be much 
smaller than it is. Furthermore, our cotton producers could not compete 
against the heavily subsidized foreign cotton in these export markets 
without MAP and FMD funded programs.
    With these programs, Cotton Council International (CCI) promotes 
U.S. cotton, yarn and fabric in the world's major markets, and the 
results are significant. A good example is Turkey, PCCA's top export 
market during the past 10 years, where CCI has worked since the mid-
1980s. U.S. cotton exports to Turkey have increased 225 percent during 
the past decade to more than 2.2 million bales, a 64 percent market 
share, with an estimated value of $1.8 billion.
    Another example is Vietnam where CCI has had a local representative 
on the ground for the past four years. By sponsoring trade missions, 
hosting seminars and working with Cotton Incorporated to carry out 
technical servicing to local mills, Vietnam's imports of U.S. cotton 
have increased 228 percent during that period, a 48 percent market 
share, with a value of $303 million.
    CCI's Sourcing USA program that promotes U.S. yarn and fabric sales 
to Latin America has led to a 50 percent increase in sales to Caribbean 
Basin countries since 2000, accounting for 90 percent of all cotton 
spun in the United States. This success has ensured as many textile-
related jobs as possible remained in our country. It also has enabled 
PCCA to invest in opportunities in Latin America to move up the value 
chain for the benefit of our farmer-owners. These investments provide 
the potential to add value to our farmers' cotton.
    Earlier, I mentioned the competition we face from heavily 
subsidized foreign cotton. A 2007 study produced by the Cotton 
Economics Research Institute of Texas Tech University summarized the 
farm policies of 21 countries for seven major crops including cotton. 
The study found that the cotton policies of Brazil, the West African 
Countries, and China include price support, direct payments or both for 
their cotton producers. Brazil and China have single and two-tier (TRQ) 
import tariffs, respectively, for cotton. Brazil's WTO bound import 
tariff for cotton is 35 percent, and China's TRQ ranges from 5 to 40 
percent on cotton imports above the quota amount. Prices received by 
cotton producers in the West African Countries are strictly controlled 
by government entities. Both Brazil and China provide credit subsidies 
and transportation/storage subsidies, and China also subsidizes input 
costs for fertilizer, irrigation, seed and energy. Thus, MAP and FMD 
funding is needed to counter these and other foreign activities.
    U.S. agricultural exports have been a strong and positive 
contributor to our country's balance of trade for many years. By 
increasing these exports, we improve the lives of our farmers, create 
jobs, improve our balance of trade, and positively affect the economy. 
I respectfully ask you to maintain the MAP and FMD programs to help 
ensure the competitiveness of our producers in the increasingly 
competitive global market.
                                 ______
                                 
 Submitted Statement by Thomas C. Dorr, President and Chief Executive 
                      Officer, U.S. Grains Council
    Thank you, Chairman Johnson, Ranking Member Costa, and 
distinguished Members of the House Agriculture Subcommittee on Rural 
Development, Research, Biotechnology, and Foreign Agriculture for 
holding this important oversight hearing to review U.S. market 
promotion programs and their effectiveness in expanding exports of U.S. 
agricultural exports.
    My name is Tom Dorr. I am President and CEO of the U.S. Grains 
Council (USGC). The Council appreciates the opportunity to submit this 
formal statement and provide our views on why these marketing programs 
are critical to the success in expanding U.S. agricultural exports.
USGC Structure and Objectives
    Founded in 1960, The Council is a private, nonprofit corporation 
with 10 international offices, representatives in 16 countries and 
programming in more than 50 countries. Its unique membership includes 
barley, corn and sorghum producer organizations and agribusinesses from 
across the United States with a common objective in developing export 
markets.
    These members provide financial support along with member goods and 
services contributions and foreign third party goods and services 
contributions totaling $13.4 million in 2010. As an eligible cooperator 
under the U.S. Department of Agriculture's Foreign Agricultural Service 
(FAS) market promotion programs, the Council was able to leverage the 
member and third party goods and services contributions and receive 
$15.4 million, primarily for use under the Market Access Program (MAP) 
and Foreign Market Development Program (FMD). This unique private-
public partnership enables the Council and FAS to jointly support the 
development, maintenance and expansion of commercial exports of U.S. 
agricultural commodities and products.
    The singular focus of the Council is emblematic of our vision--
Developing Markets, Enabling Trade, Improving Lives. We accomplish that 
vision with our ability to work with the food and feed sectors in 
countries around the world to educate and demonstrate how they can 
efficiently and effectively use feed grains to improve their ability to 
grow their industries. This, in turn, enables them to provide their 
consumers with safe, affordable food that improves their standard of 
living.
    The underlying premise of export market development is take 
advantage of potential market opportunities where there is population 
and economic growth that is generating a growing middle class looking 
to improve their diets. To accomplish that requires transparent 
government policies that comply with international trade rules and 
regulations and as well as transparent market institutions and systems. 
It can involve working with local agricultural industries to assist 
them to learn how to address policy issues with their government in the 
interest of their industry.
    It also involves exposing food and feed industries to modern 
production/management practices that increase their efficiency, quality 
and profitability. It is responding to consumer demand issues (price, 
quality, safety and preference). Finally, it involves engagement and 
constant interaction with our customers through timely market 
information and ensuring they understand how to utilize the 
information. In essence, it is about bringing change to institutions, 
policies, relationships .That in turn, serves as the catalyst for 
entrepreneurial U.S. companies to pursue these market opportunities 
which creates economic value both here domestically but also in our 
partner countries.
    The many Council programs and activities include:

   Capacity-building to the aquaculture, livestock, poultry and 
        dairy sectors in best management practices and training in feed 
        formulation and price benefits associated with using corn, 
        sorghum, barley, and important co-products such as distiller's 
        dried grains and other important value-added products;

   Marketing and promotion of food uses;

   U.S. grain trade promotion through grain marketing and risk 
        management training for grain importers;

   Working with governments to establish rules-based 
        regulations on grain standards, food safety, biotechnology and 
        transportation; and

   Addressing tariff and non-tariff barriers that are 
        constraints to trade.
Leveraging Market Development Programs
    The Council's market development programs--capacity building; 
direct trade from marketing efforts; addressing market access 
barriers--emanate from the Unified Export Strategy (UES) that is 
developed annually and forwarded to FAS for their consideration and 
approval. The UES serves as the blueprint for the various planned 
programs and activities that the Council anticipates will be 
implemented.
    MAP provides the majority of the funding for USGC market promotion 
activities. For example, through these funds, U.S. sorghum checkoff 
investments in international marketing efforts pay significant 
dividends, as evidenced by USDA's record of sorghum exports to Morocco. 
According to USDA, Morocco went from importing no U.S. sorghum in the 
2009 marketing year, to 123,000 tons (4.8 million bushels) valued at 
$21 million in the 2010 marketing year. So far in the 2011 marketing 
year through January, Morocco has imported nearly 48,000 tons valued at 
more than $11 million.
    Also funded in-part by MAP was the 2011 VIV-Asia Trade Show in 
Bangkok, Thailand. The U.S. Grains Council and some of its members 
recently took part in what is touted as the largest feed and livestock 
industry show in Southeast Asia. According to preliminary survey 
results, Council members generated an estimated $38,000 in on-site 
sales from the event, including five brokerage trades.
    Surveys also project that 12 month sales resulting from the show 
will reach at least $195,000 for Council members. The Council's 
participation in the biannual trade show allows it, and participating 
members, the opportunity to meet with current and prospective contacts 
and customers.
    In addition, a portion of MAP funds are reserved for Global Based 
Initiatives (GBI). The Council has utilized this initiative to help 
form the Food and Agriculture Export Alliance (FAEA) in 2004 as an 
effort to achieve more intensive cooperation among various commodity 
groups. FAEA members include: U.S. Grains Council (Lead organization in 
submitting GBI proposal); U.S. Soybean Export Council; U.S. Dairy 
Export Council; USA Poultry & Egg Export Council; U.S. Meat Export 
Federation--representing almost 40 percent of U.S. agricultural 
exports.
    The broad goals of FAEA are to enhance cooperation among commodity 
groups in addressing Sanitary and Phytosanitary (SPS), Technical 
Barriers to Trade (TBT), Codex and food safety issues; and to focus 
more effectively on developing export markets for the benefit of U.S. 
agriculture in general and of the U.S. grain-oilseeds-animal sectors in 
particular.
    FAEA has identified SPS regulations as an area of common concern to 
its stakeholders. This is an area that has become increasingly 
important as other forms of trade barriers are being eliminated through 
multi-party trade agreements or bilateral negotiations. SPS is now 
referred to as `the trade barrier of choice' and poses a threat to 
existing and expansion of world agricultural trade.
    The next GBI project, which began in 2007, provided for multi-year 
efforts in Vietnam to encourage development and implementation of food 
safety laws and regulations. The project goal was to increase consumer 
confidence in the safety of meat, milk and eggs, leading to accelerated 
demand growth; and to provide reasonable food safety rules that ensure 
access for imports from the United States to meet that growing demand.
    Beginning with the 2008 GBI FAEA developed and supports an English/
Mandarin website containing U.S. government documents on food safety. 
The purpose of the website is to enable Chinese government officials to 
understand U.S. food safety regulations and practices. That 
understanding will form the basis for development of Chinese food 
safety regulations in harmony with U.S. regulations. This 2010 GBI 
introduces a new opportunity for FAEA to cooperate with the Chinese 
food safety agency AQSIQ to help build harmony between central 
government regulations and actual practices in the provinces.
    Equally important the FMD program provides cost-share assistance 
for the Council's efforts to support overseas market development 
activities to remove long-term impediments to increased trade 
opportunities.
    The presence of distiller's dried grains with soluble (DDGS), a co-
product of U.S. ethanol production, is gaining popularity in markets 
around the world. U.S. corn producers send their corn to U.S. ethanol 
plants and receive added value for their crop from DDGS, a widely used 
feed ingredient in the United States.
    In the 2010 marketing year, many notable markets drastically 
increased their imports of U.S. DDGS. These markets include Chile, 
Morocco, Egypt, China, Japan and Thailand. The U.S. Grains Council 
conducts educational seminars and feeding trials to increase 
familiarity and usage of the U.S. feed ingredient.
    MAP and FMD funds have allowed the Council to actively promote DDGS 
around the world, increasing demand for the product and thus increasing 
exports to reach 7.2 million metric tons in 2010 for a total of $1.4 
billion dollars in sales.
    The Quality Samples Program has been an integral tool to 
introducing new products such as DDGS and other value-enhanced grains 
into potential export markets. Through the use of QSP, the Council was 
able to tender 60 metric tons of U.S. sorghum to Saudi Arabia in 
February 2011 for commercial poultry feeding trials.
    In Saudi Arabia, the government subsidizes feed grains--but the 
subsidy varies from grain to grain. The country is the largest importer 
of barley in the world but when global grain prices spiked in 2006-07, 
the government began to look at other grains in order to diversify its 
needs. Subsidy levels, however, continue to vary and are not always on 
par with the value of the grain.
    By conducting the trial, the Council aims to demonstrate the 
feeding value of U.S. sorghum to Saudi Arabian feed manufacturers, 
livestock producers and the government, which may then treat the feed 
grain on a more equitable basis.
    Finally, the Emerging Markets Program allows the Council and other 
cooperators to carry out technical assistance activities that promote 
the export of U.S. agricultural products and address technical barriers 
to trade in emerging markets. USGC is targeting India as a high 
potential priority emerging market. With its steadily growing 
population and annual economic growth, India is emerging middle class 
will undergo dynamic expansion and the need for increased protein in 
their diets. The Council will identify and address the policy barriers 
to trade and the best approach to resolve these issues. It will also 
involve conducting sector specific market assessments in the food and 
feed sectors and approaches to help build demand for feed products in 
their dairy and poultry sectors.
Performance and Accountability
    The Council has historically placed a high priority in 
demonstrating performance and accountability in terms of the impacts of 
its programs and activities to both FAS and to our members. USGC takes 
the responsibility of appropriately and effectively utilizing Federal 
tax dollars seriously. Over the entire period of participation of the 
market development programs, the Council has consistently met the 
requirements of the FAS Office of Compliance and Emergency planning.
    In terms of the annualized value of the trade impact of USGC 
activities, Informa Economics, a third party economic research firm, 
reviewed the Council programs and the impact it had on trade. According 
to this impartial analysis, the Council's efforts generated more $395 
million in exports last year. This equates to almost $22 worth of 
exported corn, barley, sorghum and DDGS for every $1 invested by 
members and federal government. The increased demand from these exports 
increased the price paid to U.S. farmers, generating more than $915 
million in income for all U.S. feed grain producer, providing a return 
of more than $50 in additional income for every $1 invested by the 
Council.
    The Council's objectives and strategies are assessed on a continual 
basis through the prism of policy--not just trade policy but all 
policies that can affect or impact demand, marketing and trade 
facilitation. From the assessment of all of the Council's marketing 
activities, the consistent theme was that policy constraints are the 
overarching concern in over 60 percent of all target markets.
    As a result, the Council has developed concise country market 
assessment overviews that provide a snapshot of the current and 
potential market opportunities; ranking of constraints that are policy, 
demand, marketing or trade related; desired actions to address the 
constraints; and specific performance measures to establish goals and 
calculate gains against those goals. These measures will be 
incorporated and supplement the existing benchmarks of our UES 
submissions to FAS. An example of this document is provided as 
attachment to the statement.
    In an effort to build off of this effort, the Council is 
coordinating an effort through a GBI initiative with other cooperators 
that will develop a systematic methodology for measuring market 
development gains and for relating programs to trade results across 
multiple commodities, markets and issues. We believe that a more 
comprehensive and coordinated methodology and information management 
system will enhance the ability to allocate resources wisely and report 
more accurately on the value of USDA-funded export market development 
programs.
Growing Importance of International Trade
    U.S. exports of agricultural commodities and products have grown 
significantly over the last decade. The U.S. Department of 
Agriculture's most recent announcement of a record $135.5 billion 
dollars in projected U.S. agricultural exports for FY 2011 and its 
continued growing contribution of a U.S. trade surplus demonstrate that 
strong growth.
    The opportunities for continued growth of U.S. agricultural exports 
are potentially open-ended, particularly in China, India and Southeast 
Asia. In addition, significant opportunities for strong growth of 
agricultural commodities exist in our own hemisphere.
    The Council strongly supports the Administration's National Export 
Initiative and its aggressive goals of doubling U.S. exports in the 
next five years and generating 2 million U.S. jobs, and growth. U.S. 
agriculture has been a strong contributor and beneficiary of 
participating in international markets.
    However, if U.S. agriculture is to continue to be competitive and 
take advantage of these tremendous opportunities, the U.S. Government 
has to take a leadership role in liberalizing global trade rules and 
regulations that will allow the U.S. agricultural sector to be the 
world's most reliable supplier of food and feedstuffs.
    We see great opportunity and progress if there is successful 
ratification the existing free trade agreements with Korea, Colombia 
and Panama; resolution of the decade-old Doha Development Round; and 
completion of the 21st century Trans-Pacific Partnership agreement.
    Without them, it will be extremely difficult to overcome market 
access constraints and take advantage of the strong potential growth 
opportunities. With global trade becoming increasingly important, the 
need for these market development programs becomes even more vital, 
particularly with strong competition from other trading partners that 
are aggressively pursuing bilateral and regional trade agreements with 
our most important customers.
Summary/Conclusions
    In summary, open markets that provide for the free flow of trade 
will be necessary if we are to meet the future needs of a growing world 
population their food and nutrition requirement. The United States can 
continue to be the world's most consistent and reliable supplier and 
meet the needs of countries to be self-sufficient in food, fuel, feed 
and fiber.
    As this global demand continues to grow, it will have an increasing 
role in providing economic returns to our nation's producers and 
increase economic growth and promote new job opportunities. However, 
market development programs will be even more critical if we are to 
take advantage of these global opportunities.
    Again, Mr. Chairman, Ranking Member Costa, and Members of the 
subcommittee, I appreciate the opportunity to offer the views of the 
U.S. Grains Council on these vital market development programs.
                               attachment
China
Market Snapshot--U.S. Grains Council


        China Market Profile--Prepared January 2011, U.S. Grains 
        Council.
China
USGC Game Plan 2011--U.S. Grains Council


        China Market Profile--Prepared January 2011, U.S. Grains 
        Council.
China
Weighted Performance Measures--U.S. Grains Council


        China Market Profile--Prepared January 2011, U.S. Grains 
        Council.
Submitted Letter by Dennis Engelhard, President, United States Dry Bean 
                                Council
April 15, 2011

Hon. Timothy V. Johnson,
Chairman,
Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
Agriculture, House Committee on Agriculture,
Washington, D.C.

Re: Comments for the Record for the Subcommittee's April 7, 2011 Public 
Hearing to review market promotion programs and their effectiveness on 
expanding export of U.S. agricultural products

    Dear Chairman Johnson:

    Please accept the following as comments of the United States Dry 
Bean Council submitted for the record for the Subcommittee's April 7, 
2011 hearing, the stated objective of which was to review market 
promotion programs and their effectiveness on expanding export of U.S. 
agricultural products. USDBC's purpose in submitting these comments is 
to go on record as a strong supporter of the Market Access Program, the 
Foreign Market Development Program, and other market promotion programs 
of the U.S. Government. USDBC would like to appropriately recognize the 
programs' effectiveness in helping to maintain our competitive position 
and in expanding exports of U.S. agricultural products in general, and 
U.S. grown dry beans, in particular.
    USDBC is the sole national trade association representing all 
segments of the domestic dry bean industry. Our membership includes 
state and regional grower organizations, state and regional dealer/
shipper organizations, processors, canners, retailers, and other 
entities in more than 35 states involved in the U.S. dry bean industry. 
More than 20 classes of dry edible beans were planted on more than 1.7 
million acres in the U.S. in 2010, producing dry beans with a farm gate 
value approaching $1 billion.
    As is the case with other U.S. agricultural commodities, dry bean 
exports make up a significant portion of annual U.S. dry bean 
disappearance, averaging about 35 percent of production. As a result, 
effective export market promotion is fundamental to the continued 
success and health of all segments of the U.S. dry bean industry. That 
is why USDBC has been an active participant in the MAP, FMD, and other 
export market promotion programs for a number of years, and has 
annually adopted a position paper that, among other points, strongly 
supports continuation of MAP and FMD at their full mandatory funding 
levels. In Fiscal Year 2010, USDBC was fortunate enough to utilize 
$1.08 million in MAP funds and $138,000 in FMD funds, along with 
contributed dry bean industry funds, to generically promote U.S. grown 
dry beans throughout the world.
    Some examples of positive export progress that has resulted from 
USDBC participation in these valuable programs for marketing years 2005 
through 2010 follows:

   Annual U.S. dry bean exports to the world increased 208 
        percent in value from $136,384,000 to $284,480,000;

   Participation in USDA promotion programs helped U.S. dry 
        bean exporters capture more than 15 percent share of one the 
        world's largest bean consuming markets--Mexico. U.S. exports to 
        Mexico have increased 309 percent in value from $31,797,000 to 
        $98,364,000;

   Angola, a former U.S. food aid recipient, became a major 
        importer of U.S. dry beans as a result of USDA funded market 
        promotion program activities. U.S. dry bean exports to Angola 
        have increased 367 percent in value from $2,292,000 to 
        $8,414,000;

   USDA market promotion programs helped turn around exports to 
        canners in the United Kingdom, which were being lost to 
        competing suppliers in Canada, Ethiopia, and China. U.S. dry 
        bean exports to the United Kingdom increased 167 percent in 
        value from $15,193,000 to $25,461,000;

   U.S. pinto beans have become the number one bean of choice 
        for Dominicans thanks to USDA funded trade service and consumer 
        promotion programs U.S. dry bean exports to the Dominican 
        Republic increased 300 percent in value from $7,760,000 to 
        $23,305,000;

   With the help of USDA international market promotion 
        programs the U.S. Dry Bean Council encouraged Guatemala's 
        refried bean manufacturers to use new varieties of U.S. beans 
        in their manufacturing processes. U.S. dry bean exports to 
        Guatemala increased 368 percent in value from $1,990,000 to 
        $6,924,000.

    As these examples show, the market promotion programs have 
benefited all U.S. producers of dry beans by providing efficient and 
effective overseas market development activities, such as market 
research and analysis, educational seminars, trade missions, new 
product development tailored to cultural and regional preferences, 
participation in international food shows, and other innovative trade 
servicing activities. They allow U.S. dry bean growers to compete on an 
international playing field where U.S. dry beans face difficult 
competition from subsidized producers of dry beans in countries such as 
China, Canada and the European Union, a vital point since dry beans are 
not a U.S. program crop and U.S. growers receive no price supports from 
the U.S. Government. This last point is especially important in light 
of the fact that market promotion programs, such as MAP and FMD, are 
recognized to be acceptable components of trade policy by our 
international trade organizations. USDBC has long believed that 
eliminating these programs or significantly cutting their funding, 
given the continued subsidized foreign competition we face, would be 
tantamount to unilateral disarmament of this vital export component.
    USDBC recognizes the difficult choices that are faced by the need 
for governmental spending to be more fiscally responsible. In that 
regard, we believe it is paramount that priorities be established for 
those programs that have proven their merit and that deserve to be 
maintained and preserved.
    USDBC feels strongly that MAP and FMD clearly meet that criterion, 
which was established in great detail by testimony received by the 
Subcommittee in its hearing, i.e., agricultural exports being up more 
than 300 percent since the inception of MAP and predecessor programs; 
every billion dollars generated in U.S. agricultural exports supports 
8,000 American jobs; every $1 spent in the promotion programs has 
resulted in more than $35 in export activity; the positive balance of 
trade enjoyed by agricultural exports continues to be one of the few 
bright spots in our trade environment, etc.
    Certainly, the above examples show how these promotion programs are 
providing a significant return on investment for both the U.S. taxpayer 
and the U.S. dry bean industry. Consequently, USDBC is proud to express 
its continued support for, and recognition of the vital and helpful 
role that MAP and FMD play in allowing U.S. agricultural products in 
general, and U.S. dry beans in particular, to maintain and expand our 
competitive position in international markets.
    Thank you for the opportunity to submit these comments for the 
hearing record.
            Sincerely,
            
            
Dennis Engelhard,
President,
United States Dry Bean Council.
                                 ______
                                 
    Submitted Statement by Ken O. Keck, Executive Director, Florida 
                          Department of Citrus
The Importance of Market Access Program (MAP) Funding to the Florida 
        Citrus Industry
    We commend the Subcommittee on Rural Development, Research, 
Biotechnology, and Foreign Agriculture for holding a hearing to review 
market promotion and development programs administered by USDA's 
Foreign Agricultural Service (FAS). We appreciate the opportunity to 
share information about the importance of Market Access Program (MAP) 
funding to the Florida citrus industry and respectfully request that 
this statement be made part of the official hearing record.
    The Florida Department of Citrus (FDOC), a FAS cooperator, is an 
executive agency of Florida government having the statutory mandate to 
``protect the health and welfare, and stabilize and protect the citrus 
industry of the State.''
    The FDOC represents the interests of the entire Florida citrus 
industry, which includes all geographic regions and organizations 
involved in the growing, packing, processing, shipping and selling of 
fresh and processed grapefruit, orange, and specialty citrus products. 
That representation includes approximately 45 citrus packinghouses and 
20 citrus processing plants, and over 8,000 growers, many of whom are 
small family operations. It is especially the small family growers that 
are dependent on the FDOC's promotional efforts for reliable market 
movement and strong consumer demand. Without the FDOC's consistent and 
steadfast marketing efforts over the years, many of the smaller family 
operations would not exist today.
    The FDOC has been involved in the world market since its inception 
in 1935, and has had a very successful relationship with FAS as a 
participant in the Targeted Export Assistance (TEA) program since 1986-
1987 and the Market Access Program (MAP) since the early 1990s. Despite 
global involvement for nearly 75 years, the Florida citrus industry's 
international business did not truly develop until the FDOC's 
participation in the FAS programs.
    Today, the Florida grapefruit industry is dependent on 
international trade for its survival. In the mid-1980s, only about 35 
percent of Florida's fresh grapefruit crop was exported. In the last 
five years, the overwhelming majority (over 65 percent) of the fresh 
crop was exported. Similarly, grapefruit juice exports in the mid-1980s 
comprised less than 10 percent of the total business; today over 35 
percent of Florida's grapefruit juice production is exported. Florida 
is now recognized as the world leader in fresh grapefruit and 
grapefruit juice exports. This would not have been possible without FAS 
support.
    Eliminating or reducing funding for MAP in the face of continued 
subsidized foreign competition would put the Florida citrus grower and 
workers at a substantial competitive disadvantage. In recent years, the 
European Union and other foreign competitors devoted considerable 
resources on various market development activities to promote their 
exports of agricultural products. A significant portion of this is 
carried out in Europe, which is a vital market for Florida citrus 
products.
    In addition to its market growth since the inception of the TEA 
program, Florida is considered by the international trade and foreign 
consumers as the premium supplier of citrus products. This position is 
verified annually in tracking studies conducted in countries where the 
FDOC executes programs. The premium positioning, created through 
marketing programs funded by MAP dollars, has allowed Florida exporters 
to price their products at a premium to competition. Pricing above 
foreign competition provides the more than 8,000 Florida growers with 
the opportunity to optimize returns on their crops, hence assuring 
long-term viability for the citrus industry. This is critical to an 
industry that employs more than 76,000 people and provides a $9 billion 
annual impact to the State of Florida.
    Because unemployment is of such critical concern to our nation, and 
is so acute in Florida today, we have performed an analysis of the 
employment directly attributable to the continued full funding of the 
MAP program, by selected Florida Congressional Districts. This analysis 
reveals that today almost 1,500 jobs throughout the citrus growing 
region of Florida rely directly on the approximate $5 million provided 
by MAP to the Florida Department of Citrus.
    Thank you for the opportunity to provide information to the 
Subcommittee. On behalf of the Florida citrus industry, we ask that the 
MAP and other vital FAS programs be sustained to help ensure the 
competitiveness of American agricultural producers in the increasingly 
competitive global marketplace.
            Respectfully submitted,
            
            
Ken O. Keck,
Executive Director,
Florida Department of Citrus.
                                 charts




















Submitted Letter by Chiles Wilson, President, Rivermaid Trading Company
April 15, 2011

Subcommittee on Rural Development, Research, Biotechnology, and Foreign 
Agriculture, House Committee on Agriculture,
Washington, D.C.

    Dear Members of the Subcommittee,

    Thank you for this opportunity to indicate our strong support for 
U.S. agricultural export programs such as the Market Access Program 
(MAP). As President of Rivermaid Trading Company, I have seen firsthand 
the impact that MAP funding has had on our company and the California 
pear industry as a whole.
    Due to a variety of factors, including high input costs and 
declines in demand for pears, the California pear industry has 
struggled in the domestic market in the past several years. MAP funding 
granted to the California Pear Advisory Board (CPAB) has allowed pear 
shippers such as Rivermaid to expand export markets and continue to 
thrive.
    CPAB has used MAP and industry funds to conduct a very successful 
marketing program in Canada. Without the support of MAP funding, the 
industry's small and family businesses would not have the resources to 
aggressively promote their pears in the Canadian market. By pooling 
industry resources and leveraging MAP assistance, California pear 
shippers have been able to maintain a strong presence in Canada. In 
2010, Rivermaid exported 1,992 tons of pears worth $1,872,552 to Canada 
in part due to the marketing support provided by the MAP program.
    Mexico is also an important market for the California pear 
industry, and one where MAP funding is equally important. Despite 
setbacks for the industry related to Mexico's retaliatory tariffs on 
U.S. pears, MAP grants have allowed CPAB to continue working with 
retailers to put on successful promotions to increase California pear 
sales. Rivermaid shipped $1,132,145 worth of pears to Mexico in 2010.
    As these examples demonstrate, MAP plays a vital role in assisting 
California's pear farmers to market and export their products abroad. 
With approximately 19% of the California fresh pear crop going to 
foreign markets, Rivermaid Trading Company and other industry members 
depend on the programs that MAP supports. The program is a shining 
example of a government-industry partnership that results in solid, 
noticeable returns for U.S. agricultural producers and the rural 
communities that they sustain.
    Another important program is the Technical Assistance for Specialty 
Crops (TASC) grant, which provides the California pear industry with a 
way to respond quickly when new technical trade issues arise. Sanitary 
and phytosanitary issues are increasingly being used as trade barriers 
around the world, and the TASC program has been used to provide the 
California specialty crop industry with the information, research, and 
systems needed to address these issues and keep export markets open. 
TASC is a welcome source of support, especially considering the number 
of invasive pests that have become established in California in the 
past few years. The program is a valuable resource that allows the 
California pear industry to fight against and eliminate technical trade 
barriers that would otherwise significantly restrict trade.
    I realize that in this time of tight budgets, Congress is looking 
for places to cut programs. However, the value of the MAP and TASC 
programs and the difference they make to Rivermaid and other U.S. 
agricultural producers' bottom line cannot be overstated. I urge you to 
continue funding these agricultural export programs at the maximum 
levels provided for in the farm bill.
    Thank you again for considering my comments on this important 
matter.
            Sincerely,
            
            
Chiles Wilson,
President,
Rivermaid Trading Company.
                                 ______
                                 
         Submitted Statement by American Seed Trade Association
    Chairman Johnson and Members of the Committee, thank you for the 
opportunity to provide a statement for the record supporting the U.S. 
Department of Agriculture's (USDA) cooperator programs and their 
effectiveness on expanding exports of U.S. agricultural products. On 
behalf of the American Seed Trade Association (ASTA) and its more than 
700 members, we are pleased to provide comment to the Committee 
regarding the importance of these programs and the American seed 
industry's participation in them.
Who We Are
    Founded in 1883 and located in Alexandria, VA, ASTA is one of the 
most established trade organizations in the United States. Our 
membership is involved in production and distribution, plant breeding 
and related industries around the globe. As an authority on plant 
germplasm, ASTA advocates science and policy issues important to the 
industry.
    ASTA's mission is to be an effective voice of action in all matters 
concerning the development, marketing and movement of seed, associated 
products and services throughout the world. ASTA promotes the 
development of better seed to produce better crops for a better quality 
of life. Our members represent all areas of the seed industry--from 
alfalfa to zucchini and range in size from small and medium regional 
seed companies, to large multi-nationals. ASTA members develop and 
market seed produced through conventional plant breeding, organic and 
modern biotechnology techniques.
    Ninety-two percent of ASTA's active members are small businesses 
that report annual sales of less than $16 million. Without ASTA's 
efforts overseas, supported by cooperator program funding, many of 
these small- to medium-sized companies would not have a representative 
in key markets. Company participation and access through the programs 
result in jobs at the local level, increased global sales and 
profitability.
Importance of Seed
    The U.S. seed industry is one of the most dynamic in the world. It 
is also increasingly subject to the forces of globalization. The U.S. 
seed industry has a commercial value of approximately $12 billion. With 
more than 60,000 varieties of planting seed, the United States is the 
largest and most diverse planting seed market in the world.
    An important breeding and technology center for the global seed 
industry, the United States attracts the largest and most viable seed 
companies from around the globe. The seed industry is poised to 
continue to invest a large share of its revenue in research and 
development in techniques such as genetic engineering and traditional 
and marker assisted breeding to develop beneficial novel traits and 
improved germplasm. In the seed industry, there has been a shift in 
global research expenditures from the public sector to the private 
sector. Private expenditures during the past two decades have outpaced 
those of the public sector. This trend was brought about by such 
factors as increased return from planting seed exports, improved 
intellectual property rights protection, and the entry of life science 
companies into the planting seed industry. This trend benefits the U.S. 
farmer, agricultural commodity groups, food and feed industries. This 
is especially true for members of the seed industry, where the 
overwhelming majority of seed companies are small and medium in size 
and resources.
    With the global commercial market for planting seed estimated at 
$38.5 billion, the U.S. market is estimated to be 30 percent of the 
global market. The domestic share of U.S. seed exported is equal to 
approximately $1.25 billion which is approximately 10 percent of the 
overall value of the U.S. seed industry.
    A number of factors are needed to support export growth including:

   International regulations that promote the movement of seed

   Improved global economic conditions

   Liberalized government agricultural and trade policies

   Global acceptance of biotechnology and science based 
        regulations

   Bilateral and multilateral free trade agreements

   Adoption and enforcement of intellectual property rights

   Elimination of phytosanitary constraints to trade

   Science based policies and regulations

   Better understanding for how seed moves globally

   Increased demand and familiarity of U.S. cultivars and seed 
        technology

    In many emerging markets, it is estimated that formal seed commerce 
accounts for only 10-20 percent of their total market with the 
remaining 80-90 percent supplied by the non-commercial or informal 
market (i.e., farmer saved seed). The global market for seed still 
shows great potential for future introduction of improved U.S. 
varieties. However, the implementation of robust intellectual property 
regulations, particularly in emerging markets around the globe, is 
necessary for the widespread introduction of these new and improved 
varieties.
    As a Cooperator of the USDA's Foreign Market Development (FMD) and 
Market Access (MAP) programs, ASTA has been involved in export 
promotion and development activities for more than 50 years. ASTA does 
not have an overseas staff, which means the association and its members 
rely heavily on the USDA-Foreign Agricultural Services' (FAS) offices 
overseas. ASTA has developed a cooperative and complimentary 
relationship with FAS posts to achieve U.S. seed industry and USDA 
objectives in priority markets.
    Seed exports continue to track higher and as a Cooperator, ASTA has 
utilized cooperator program funding for activities that have reinforced 
this upward trend.

------------------------------------------------------------------------
       Export Year           U.S. Exports ($)         World Trade ($)
------------------------------------------------------------------------
             2006               879,680,000           3,993,838,493
             2007             1,019,679,000           4,033,776,878
             2008             1,277,310,000           4,074,114,646
             2009             1,150,403,000           4,114,855,733
             2010             1,253,484,375         * 4,156,004,351
------------------------------------------------------------------------
 Estimate.

How ASTA Directs Cooperator Funding
    ASTA receives approximately $350,000 between MAP and FMD programs. 
With this budget, ASTA operates programs and activities in five 
priority markets (Argentina, Brazil, Mexico, China, and India). In 
addition, three regional markets (The Americas, Asia Pacific, and 
Africa) are targeted. Key issues include intellectual property rights, 
phytosanitary trade barriers and Adventitious Presence/Low-level 
Presence in seed. Without cooperator program funding, the seed 
industry's efforts to expand U.S. seed exports and business development 
would be markedly reduced.
    The seed industry is unique in that it is a highly regulated 
industry worldwide. Utilization of the MAP and FMD programs allows ASTA 
to address resulting impediments to the international movement of seed. 
The focus of ASTA's export promotion activities has been primarily 
focused on six areas:

   International organizational meetings to promote trade in 
        seed and seed technology worldwide and enhancements of 
        intellectual property rights

   Incoming/outgoing trade missions for international 
        consultation and discussions designed to overcome unfair trade 
        practices and addressing phytosanitary issues affecting U.S. 
        seed exports

   Exploratory trade missions designed to collect market 
        intelligence and foster commercial relationships for U.S. seed 
        companies

   Mutually beneficial programs of technical assistance and 
        capacity building designed to encourage seed regulatory and 
        policy reform in less developed or emerging seed markets 
        worldwide

   Viable framework and system promotion for trade in 
        biotechnology products

   International agricultural and seed trade policy 
        specifically focused on intellectual property rights protection 
        and phytosanitary regulations
Measuring Success
    In 2010-2011, several key accomplishments were recorded as a result 
of ASTA's direct participation in the cooperator programs. These 
specific success stories highlight the diversity of the seed industry, 
the global nature of agriculture and new opportunities for seed 
exports.
Mexico's NOM 078 Regulation for Sorghum Ergot Repealed
    On Dec.14, 2010 Mexico's counterpart to USDA's Animal and Plant 
Health Inspection Service (APHIS) advised that the final steps to 
deregulate sorghum ergot were complete. For U.S. companies exporting 
sorghum seed to Mexico, this victory was a long and hard fought battle. 
The action, the last step in a three year effort, was well received by 
U.S. companies that ship more than $5 million of sorghum seed annually 
to Mexico. ASTA's ability to direct cooperator funds to the effort 
complemented APHIS's efforts via extended discussions with government 
officials and Mexico's seed trade association.
Korean Market for Radish Seed Re-Opened
    In 2011, a small seed company was experiencing difficulties 
exporting radish seed to Korea, due to the radish yellow edge virus 
(RYEV). Although the company had followed all protocols for meeting 
Korean import requirements, RYEV had never officially been communicated 
to the United States by Korea as a quarantine pest. For its part, ASTA 
began directing efforts and learned that this particular virus was 
common and most likely already present in Korea. By coordinating 
testing protocols and industry intelligence, APHIS and ASTA worked with 
the Korean government to lift its testing requirement for the virus. 
The market for radish seed has been re-opened and the company 
immediately shipped four loads of seed, worth nearly $300,000. The 
company is planning to ship an additional $500,000 of radish seed for 
the remainder of 2011.
Argentina Intellectual Property Rights Outreach Project
    The most valuable asset of the seed industry is its intellectual 
property. ASTA utilized cooperator funds in Argentina to conduct 
outreach and education to industry stakeholders and growers. The 
message focused on the value of seed by highlighting research 
investment and the commitment of the seed industry to bring new and 
improved varieties to the market each year for growers. Moreover, 
advancing and acknowledging intellectual property rights was a shared 
responsibility. The goal of the project was to evaluate whether or not 
access to information explaining the importance of intellectual 
property rights for seed and innovation had any effect on growers 
opinion and their perception of purchasing legal seed. The conclusion 
was that grower awareness significantly increased and that innovation 
is better understood.
U.S./EU Bilateral Agreement on Seed Re-Export
    Re-export of seed continues to be a major challenge for the seed 
industry. Every time seed is moved from one country to another, it must 
meet the phytosanitary import requirements of the next country of 
import. In most cases, if the phytosanitary measures were not conducted 
in the country of origin where the seed was produced, the seed cannot 
be certified by the country of re-export as meeting the phytosanitary 
import requirements of the next country. This issue caused many delays 
and lost markets for numerous seed companies that move seed 
internationally. ASTA worked closely with USDA's APHIS to negotiate 
bilateral agreements between countries with significant seed re-export 
problems. Due to years of APHIS and ASTA diligence, an agreement with 
the European Union is expected to impact more than $50 million in seed 
trade annually. APHIS continues to pursue, with ASTA's support, 
agreements with other countries where re-export remains an issue, 
including Mexico, Chile, and Argentina.
2010 China-U.S. Seed Legal System Conference
    ASTA has been working in China and with the Ministry of Agriculture 
for a number of years. In 2010, a conference utilizing cooperator funds 
was held in Beijing to discuss China's seed law and ways to implement 
revisions and improvements using the United States' Federal Seed Act 
and state seed laws as models. In addition, presentations and 
discussions included the United States' seed certification process and 
the use of licenses and contracts in the U.S. seed industry. ASTA views 
these steps as incremental and key to addressing more uniform, 
harmonized, and transparent views and policies on intellectual property 
rights for U.S. and global seed developers and enhancing grower 
awareness.
Brazil Normative 36 Amended, Seed Markets Kept Open
    On Dec. 30, 2010, Brazil published with no comment period, 
Normative 36, which lays out new, highly restrictive phytosanitary 
import requirements for 118 different species of seeds. Impacting 50 
countries that export seeds to Brazil, neither the U.S. seed industry, 
nor the World Trade Organization or U.S. government was informed prior 
to publication of the normative. The collective value of the U.S. 
commercial seed market in Brazil exceeds $10 million annually. ASTA 
partnered with USDA through FAS and APHIS to address this issue. While 
the restrictive normative has been amended for one year, ASTA continues 
to work diligently with U.S. government as well as ASTA counterparts in 
Brazil, the Brazil Seed Association (ABRASEM) and Brazil's Ministry of 
Agriculture for a long term resolution so that seed exports to Brazil 
will not be further interrupted.
Conclusion
    These examples illustrate a number of successes that would not have 
been possible if the cooperator programs were not in place. Members of 
the American seed industry have benefitted greatly from the cooperator 
programs and USDA's leadership via the FMD and MAP programs. Through 
targeted programs and seed industry efforts, markets have been 
enhanced, identified and seed is moving. Phytosanitary issues are being 
addressed and incremental progress continues to be made. ASTA firmly 
believes that the cooperator programs better position the U.S. seed 
industry to compete in the global marketplace. Agriculture's foundation 
is the seed and the U.S. seed industry is poised to continue making 
headway throughout the world. U.S. agriculture depends on quality seed 
and each year the U.S. seed industry strives to maintain its position 
as the global leader. The commercial value of that position is 
approximately $12 billion and growing.
    Thank you for this opportunity to share with the Committee examples 
of ASTA's work through the USDA cooperator programs, not only for the 
seed industry, but U.S. agriculture in general. ASTA's motto--first the 
seed--confirms the relevance and role of quality seed, here at home and 
around the world. We maintain that the cooperator programs add value to 
U.S. agriculture, provide dividends to the U.S. taxpayer and support 
small and medium sized seed companies at the local level. We urge the 
Congress, as budget discussions continue, to support the cooperator 
programs at USDA. In doing so, U.S. agriculture benefits and, the U.S. 
seed industry prospers.
                                 ______
                                 
             Submitted Statement by U.S. Apple Association
    Mr. Chairman and Members of the Committee, exports play a critical 
role in the economic vitality of the American apple industry. Promotion 
programs established under the farm bill are vital tools to help 
maintain and increase overseas apple sales in the face of fierce 
foreign competition. Under these programs, U.S. apple growers partner 
with the U.S. Department of Agriculture (USDA) to increase consumption 
of U.S. apples overseas and capture markets from foreign producers.
    American apples are grown commercially in over 30 states, from 
Michigan to North Carolina and Washington to Maine. Our $2.2 billion 
crop is produced on approximately 350,000 acres. U.S. apple exports 
reached almost $800 million in 2009, or 40 percent of our total crop 
value. This means that over $1 in every $3 in apple revenue comes from 
exports. Overseas apple sales are critical for our orchards and the 
entire apple industry.
    The U.S. Apple Association appreciates this Committee's support to 
authorize and fund various important export promotion programs in the 
2008 Farm Bill. The Market Access Program, the Technical Assistance for 
Specialty Crops Program and the Emerging Markets Program are utilized 
by the apple industry in partnership with USDA to grow foreign demand 
and maintain a strong marketplace for our fruit. Looking to the future, 
we believe our strongest market growth potential lies in the export 
arena, especially in developing economies as per capita incomes 
increase and diets improve. However, we face stiff competition from 
foreign producers to capture these market opportunities.
    USDA's promotion programs help level the playing field as we 
compete in the export market against countries such as China and Chile 
that have lower production costs. U.S. apple growers are confident in 
their ability to compete around the world based on quality, 
reliability, and often brand identity. However, they cannot compete 
against the treasuries of foreign governments which support export 
promotion and sales. For example in China, which grows half the world's 
apples, the government has encouraged aggressive exports with the 
benefit of an undervalued currency, the renminbi. This makes imports 
more expensive in China and Chinese exports less expensive in foreign 
markets. China's lower production costs for apples are largely 
attributable to an abundant, inexpensive supply of unskilled labor in 
rural areas relative to the labor-scarce United States. (Both the 
renminbi and labor factors are cited in the recent report, ``China's 
Agricultural Trade: Competitive Conditions and Effects on U.S. 
Exports,'' (http://www.usitc.gov/publications/332/pub4219.pdf) USITC 
Publication 4219, March 2011.) USDA's promotion programs are important 
to help counteract the effects of such foreign assistance.
    The Market Access Program (MAP) provides critical funding, more 
than matched by industry contributions, to promote American apple 
consumption around the world. Without MAP, individual apple growers 
would not have the financial resources or organizational support for 
this essential foreign market development and promotion. The apple 
industry is made up of many individual small businesses, from growers 
and packers to shippers and exporters. The MAP program provides a 
catalyst for them to work together collectively in partnership with 
USDA to grow markets overseas.
    The Technical Assistance for Specialty Crops program (TASC) 
complements the MAP program because it helps our industry reduce 
foreign sanitary, phytosanitary and technical barriers that prohibit or 
threaten apple exports. TASC is a nimble, quick-response program which 
enables apple growers to reduce these trade barriers in order to 
maintain access to current markets and open new ones where they can 
utilize MAP.
    The Emerging Markets Program (EMP) is designed to develop and 
promote exports of U.S. agricultural products to low and middle income 
emerging markets. EMP has opened the door for apple growers to initiate 
MAP programs in new markets. The program has enabled apple growers to 
conduct market research essential to understanding new potential 
customers and in-country market opportunities.
    MAP, TASC and EMP yield tangible and valuable results for the U.S. 
apple industry and the overall U.S. economy. Several examples 
illustrate how they have helped the nation's small apple businesses 
successfully gain long-term export customers.
TASC and MAP Boost Apple Exports to Mexico
    TASC allowed apple shippers from Michigan, Virginia and California 
to bring the required Mexican inspectors to each state, to review the 
cold treatment facilities and the treatments undertaken for each apple 
sold to Mexico. Simultaneously, the TASC program has funded efforts for 
these shippers to bring in technical experts and to work with APHIS and 
our Mexican counterparts to find ways to reduce this onerous 
requirement. Without TASC funding, growers and shippers in Michigan, 
Virginia and California would lose important export sales and contacts 
that they have spent years to develop. Between 2003 and 2010, these 
exports have accounted for well over $6 million, all exports that would 
not have occurred without TASC and MAP funding.
    MAP funding enabled Washington apple growers, in partnership with 
the Northwest pear and California table grape industries, to conduct a 
month-long promotion last fall in Mexico with the popular children's 
television show ``Lazytown.'' Mexico is a major market for all three 
fruits and holds strong potential for additional growth. This promotion 
was funded under MAP's Global-Based Initiative program which encourages 
collaboration among cooperator groups who have a similar project goal.
    The Lazytown promotion resulted in an historic first-time 
partnership between the Mexican government, USDA and U.S. cooperator 
groups. Lazytown is a popular children's show that airs to an estimated 
500 million homes in 128 countries world-wide, including Mexico. The 
theme of every episode of ``Lazytown'' is designed to motivate kids to 
make healthy lifestyle choices. This is done through ``leading by 
example.'' The main character (and healthy superhero) eats ``sports 
candy'' (fruits and vegetables) to get energy to overcome the lazy 
plots and schemes of the show's villain to make the kids of 
``Lazytown'' lazy. The Mexican Secretary of Health endorsed this 
Lazytown project and provided an umbrella under which to incorporate 
national and regional Mexican retailers.
    The promotion incorporated media coverage promoting health with 
Lazytown's superhero, along with wide in-store sampling, superhero 
store events, and promotional materials featuring the Lazytown 
characters, and Washington apples, Northwest pears and California table 
grapes.
    Additional funding has been granted to continue the Lazytown 
promotion in winter 2011-12.
    As a result of this promotion, Washington apple exports increased 
29% in November 2010 compared to the previous season. In value, exports 
increased 38% over 2009-10 for a total of $13.5 million (an increase of 
$3.7 million). Retailers experienced strong sales lift, and the 
promotion strengthened business relationships with the apple industry.

    Importantly, this promotion yielded successful results despite 
imposition by Mexico of a new 20 percent duty on imports of U.S. apples 
last August as the fall harvest was starting. Without the tariff, 
Mexican consumers could have enjoyed even more U.S. apples.
EMP and MAP: India Seen as Key Future Market for Apple Exports from 
        Pennsylvania, New York and Michigan
    The apple industry used EMP funds to conduct market research in 
India. An in-country representative was then hired to help identify 
appropriate targets and educate Indian apple importers and retailers 
about the quality and varieties of the apples grown on the East Coast 
of the U.S. In 2009-10, eastern apple shippers developed a strong 
business in India with sales in excess of $2 million. These shippers 
hope to expand this new market by offering exports off of the East 
Coast that are competitive with other routes. Indian interest has been 
strong for apples from Michigan, New York and Pennsylvania. All of this 
interest and sales can be directly traced back to the impact of the 
EMP-funded research, initial market development activities, and MAP-
funded trade show presence and programs to promote apples at retail and 
wholesale outlets in India. These businesses in Pennsylvania, Michigan 
and New York view the Indian market as a key element to their future 
businesses and long-term success.
MAP: Middle East Market Grows for Washington Apples
    Using MAP funds, retail promotions and merchandising activities 
were implemented by the Washington apple industry in the United Arab 
Emirates and Saudi Arabia in the current marketing year. As a result, 
exports of apples expanded significantly to the two markets. From 
September 1, 2010 through March 31, 2011, Washington apple exports rose 
by more than one third in volume, compared to the same period last 
year. Export value increased 32 percent, or $9.1 million.

------------------------------------------------------------------------
                           2009-10                      2010-11
               ---------------------------------------------------------
                    No. of      Estimated $      No. of      Estimated $
                   Cartons         Value         Cartons        Value
------------------------------------------------------------------------
         UAE         972,073   $18.5 million     1,297,568         $23.9
                                                                 million
Saudi Arabia         635,431   $12.1 million       861,973         $15.8
                                                                 million
------------------------------------------------------------------------

    Promotional activities reinforced the quality image of Washington 
apples and created awareness, visibility and demand for new apple 
varieties, namely Gala and Fuji, which registered record high export 
growth this season (Gala and Fujis surging 75.4% and 17.7%, 
respectively).
    Despite the competition from Europe, Southern Hemisphere suppliers 
and Lebanon and Syria, Washington apples are maintaining upward sales 
momentum.
TASC: Reducing Technical Barriers for Apple Exports to Mexico
    Mexico is the single largest export market for U.S. apple exports. 
Consequently, the apple industry must address technical trade issues 
with the Mexican government to help ensure that the market remains 
accessible for growers, shippers and exporters.
    In 2009, TASC funded projects to produce pest information and 
educate Mexican plant quarantine officials about the Pacific Northwest 
fruit industry, including apples. One program provided for survey 
trapping for the Oriental Fruit Moth, as required by Mexico's Director 
General de Sanidad Vegetal (DGSV), from spring to the flight of the 
final generation. The trapping was done in Idaho and Washington to 
verify population levels of OFM previously reported to Mexico which 
were based on trapping done a number of years ago. Another program 
funded an on-site verification visit of Mexican plant quarantine 
officials during the apple growing season to review conditions in 
registered export orchards and participating packinghouses.
TASC: Providing MRL Data for Foreign Markets
    TASC has funded the establishment and continued operation of a 
vital database of international maximum residue limits (MRL's) for 
specialty crops. The apple industry uses this database to verify 
specific MRL requirements in foreign markets. Produce that does not 
meet the MRL standards of an overseas country may not be exported 
there. EPA has participated as a financial partner to support this 
project. The MRL database for specialty crops is recognized by the U.S. 
Government, commodity groups and pesticide registrants as having the 
most accurate MRL information available.
Conclusion
    MAP, TASC and EMP are important USDA programs which yield direct 
increases in export sales for U.S. apple growers, help maintain jobs 
for their employees and support their rural communities. These programs 
help growers compete against foreign producers aided by overseas 
governments.
    In partnership with USDA, apple growers are committed to succeeding 
in the export market in order to build strong future for their family 
businesses. To remain globally competitive, the American apple industry 
supports strong MAP and other promotion programs as part of an 
aggressive trade title in the next Farm Bill.
                                 ______
                                 
 Submitted Statement by U.S. Wheat Associates; National Association of 
                             Wheat Growers
    The free and fair flow of trade is essential to U.S. wheat farmers 
as roughly half of the wheat they produce is exported each year. In the 
most recent full marketing year (2009/10), the United States exported 
24.0 million metric tons (MMT) of wheat, roughly 40 percent of 
production. Also in 2009/10, the United States accounted for nearly 18 
percent of global exports as world wheat exports were estimated at 
135.8 MMT. In 2010/11, U.S. wheat exports are expected to reach 34.5 
MMT, representing 58 percent of domestic production and 28 percent of 
world wheat trade.
    The National Association of Wheat Growers (NAWG) was founded more 
than 60 years ago by producers to work together for the common good of 
the industry. Today, NAWG works with its 21 state associations and many 
coalition partners to unite the wheat industry on issues as diverse as 
federal farm policy, environmental regulation and the future 
commercialization of biotechnology in wheat.
    U.S. Wheat Associates (USW), the wheat industry's export market 
development organization, conducts training and provides information to 
customers in more than 100 countries on behalf of America's wheat 
producers. USW's activities are made possible by producer check off 
dollars managed by 18 state wheat commissions and cost-share funding 
from the Market Access Program (MAP) and Foreign Market Development 
(FMD) program administered by USDA's Foreign Agricultural Service. USW 
works on behalf of American wheat producers to increase wheat exports 
by collaborating with foreign government officials and industry 
representatives to address market constraints and opportunities.
    USW and NAWG appreciate the opportunity to comment for the record 
on the importance of market development programs and their role in 
agricultural trade. Wheat has benefitted from FMD and MAP for many 
years and was one of the first associations to utilize the FMD program 
after its creation in the 1950s. U.S. wheat producers understand the 
importance of exports to their profitability and contribute roughly 50 
percent of USW's promotional expenses through direct contributions and 
in-kind support to match government program funds. These funds support 
a network of 15 overseas offices as well as the promotional activities.
    USW staff presence in these markets allows for routine contact with 
overseas customers to educate them on the process and benefits of 
buying U.S. wheat, to identify and promote U.S. wheat to potential new 
customers and to follow-up on previous purchases to ensure a positive 
experience from start to finish. The routine on-the-ground contact 
provides assurance, creates confidence and is a key factor for 
continuing a high level of U.S. wheat exports in the face of 
competition from a number of wheat exporting nations.
    USW promotional activities funded by MAP and FMD are multi-faceted. 
One on one meetings through trade servicing educates customers on the 
marketing system, qualities and contracting of U.S. wheat and creates 
comfort and confidence in navigating the complex U.S. system. Technical 
assistance to properly mill and bake U.S. wheat ensures that the full 
value of U.S. wheat is extracted from each purchase. USW routinely 
sponsors trade teams of customers to the United States for a firsthand 
experience in understanding the various assurances built into our 
marketing system. In addition, customers routinely attend courses at 
partner institutions such as the International Grains Program at Kansas 
State University, the Northern Crops Institute at North Dakota State 
University and the Wheat Marketing Center in Portland, Oregon.
    The increased quantity of wheat exports to Nigeria is an example of 
the remarkable success of the MAP and FMD export promotion programs. 
USW worked collaboratively with new market players to educate them on 
the U.S. wheat marketing system and to help develop local products made 
from U.S. wheat. These efforts resulted in the importation of all six 
U.S. wheat classes and to Nigeria becoming the top U.S. wheat customer 
in 2009/10. USW efforts resulted in loyalty by Nigerian millers and the 
United States maintains an 80 percent market share, despite increased 
price competition from Canada and the Black Sea region.
    Agriculture is a bright spot in the U.S. economy and agricultural 
trade is unique compared to traditional goods. Agriculture consistently 
maintains a trade surplus, thanks in part to cooperator activities 
funded through FMD and MAP programs. USW and NAWG are proud of the 
success already accomplished by USDA/FAS as well as the relationship 
with USTR in overcoming trade and technical barriers. The structure 
within USDA and the communication between intertwined agencies such as 
the Foreign Agricultural Service (FAS), the Animal Plant Health 
Inspection Service (APHIS), the Federal Grain Inspection Service (FGIS) 
and others facilitates the efficient export of goods as well as the 
timely resolutions of trade disruptions. The special trade issues that 
agriculture faces needs to be an important consideration in any 
reorganization plan of the government's trade-related agencies.
    Attached is a fact sheet specific to wheat on the FMD and MAP 
programs to illustrate the impressive benefits of USDA's market 
development programs, and their admirable returns on investment. We 
encourage Congress to support the Obama Administration's fiscal year 
2012 budget request and fully fund both programs at $34.5 million and 
$200 million, respectively. As already proven, these relatively small 
investments by the American people will continue to create impressive 
returns to U.S. farmers, U.S. agriculture and the U.S. economy.
                               attachment
Fact Sheet
Market Access Program, Foreign Market Development Benefits
January 2011
    The Market Access Program (MAP) and Foreign Market Development 
(FMD) program administered by USDA's Foreign Agricultural Service (FAS) 
form the core of a highly successful partnership between nonprofit U.S. 
agricultural trade associations, farmer cooperatives, nonprofit state-
regional trade groups, small businesses, and USDA to share the costs of 
overseas market development efforts. These programs continue to have a 
positive and significant impact on U.S. agricultural exports. MAP and 
FMD are crucial to the U.S. wheat industry to maintain sales and market 
share in an increasingly competitive trade environment.

    By any measure, MAP and FMD are good government programs with:

   excellent returns, that actually grow with investment, to 
        the government and farmer cooperators;

   proven potential to create American jobs and help the rural 
        economy grow;

   efficient, effective administration;

   direct contributions that improve conditions for the private 
        sector to increase exports;

   benefits to the entire agricultural supply chain from wheat 
        farmers to the longshoremen who load wheat on vessels for 
        export.
Excellent Return on Investment
    An independent study conducted by IHS Global Insight, Inc., for 
USDA in 2010 found that between 2002 and 2009, the incremental 
investment in market development increased U.S. export market share by 
1.3 percentage points and the annual value of U.S. agricultural exports 
by $6.1 billion. For every additional $1 expended by government and 
industry on market development, U.S. food and agricultural exports 
increased by $35.
    These results are consistent with the conclusions of a January 2010 
economic analysis of wheat export promotion showing U.S. wheat farmers 
received $23 in net revenue for every $1 they invested in export 
promotion between 2000 and 2007. The study also showed that every $1 
invested by U.S. wheat farmers and the government returns $115 to the 
U.S. economy.

------------------------------------------------------------------------

------------------------------------------------------------------------
       $1    investment

    = $35    increase in exports

    = $23    to Farmers

   = $115    to U.S. Economy
------------------------------------------------------------------------

An Effective Public-Private Partnership
    Industry funds currently represent almost 60% of total annual 
market development spending, up from about 45% in 1996 and roughly 30% 
in 1991, which demonstrates farmer commitment to the effort (Source 
USDA). Like other cooperators, U.S. wheat farmers are strongly 
committed to this partnership. Wheat commissions from 19 states 
contributed an estimated $12.8 million in checkoff funds and in-kind 
services in 2009/2010 to qualify for MAP and FMD activities conducted 
by U.S. Wheat Associates. These cost-share programs provide a critical 
incentive to invest in U.S. grain export market development. Without 
them, it is highly unlikely that there would be sufficient private 
funds to maintain a strategic, coordinated export promotion program in 
the increasingly competitive global wheat market.
MAP and FMD Contribute to Jobs at Home and Capacity Building Abroad
    U.S. agricultural exports totaled nearly $109 billion in FY10. 
Since MAP was created in 1985, U.S. agricultural exports increased by 
nearly 300 percent at their peak in 2008 (Source USDA). USDA estimates 
that every $1 billion in agricultural exports create 8,000 jobs. Thus 
more than 800,000 Americans have jobs that depend on these exports 
thanks in part to MAP, FMD and related programs. We can expect 
increased demand for agricultural products as the global economy 
recovers, which reinforces the need for such valuable programs as MAP 
and FMD that help create, expand, and maintain markets for U.S. 
agricultural products.

------------------------------------------------------------------------

-------------------------------------------------------------------------
  ``. . . more than 800,000 Americans have jobs that depend on these
 exports thanks in part to MAP, FMD and related programs.''
------------------------------------------------------------------------

    The benefits of export market development extend beyond U.S. 
shores, however. Nigeria imported more U.S. wheat than any other 
country in 2009/10. Since 2001 when USW opened a technical service 
office in Lagos supported by FMD and MAP funds, average annual wheat 
sales to Nigeria have doubled to almost 3 million metric tons. Nigerian 
flour milling executives say wheat export promotion is helping build 
economic capacity in their country. One senior executive said: ``MAP 
and other programs provide training for our employees and if we can do 
more together, the potential for significant growth is there.'' Noting 
that USW uses MAP funds for technical training that helps build new 
wheat-based food markets, the CEO of Nigeria's Honeywell Flour said: 
``Whatever we have achieved, the foundation has been laid by U.S. Wheat 
Associates. We know that USW is funded by farmers and USDA. It is money 
well-spent.''
MAP and FMD Help Counter Subsidized Foreign Competition
    In recent years, the Canadian Wheat Board monopoly seller, the EU, 
the Cairns Group, and other foreign competitors have devoted 
considerable resources on agricultural export market development 
activities, a significant portion of which is carried out in the United 
States. Eliminating or reducing funding for MAP in the face of 
continued subsidized foreign competition will put American farmers and 
workers at a substantial competitive disadvantage. Conversely, 
maintaining or increasing MAP and FMD programs, which are non-trade 
distorting and not subject to World Trade Organization (WTO) 
disciplines, increases U.S. export competitiveness.
    Funding for FMD is designed to establish an on-the-ground country 
or regional presence, identify new markets and address long-term 
foreign import constraints and export growth opportunities. Yet funding 
for FMD has been static for many years while overseas expenses continue 
to increase. Like other FAS cooperators, U.S. Wheat Associates does all 
it can to maximize its efficiency and has already made significant FMD 
cuts by consolidating offices and reducing staff. Additional funding 
cuts will force U.S. Wheat Associates to abandon markets with upside 
potential, an outcome that will only benefit our competitors and hurt 
American farmers and those whose jobs depend on exports.

    Protecting MAP and FMD makes good economic sense. If you want to 
reduce government spending and increase jobs, cutting MAP and FMD is 
not the way to do it.
                                 ______
                                 
               Submitted Statement by USA Rice Federation
    Mr. Chairman and Members of the Subcommittee, the USA Rice 
Federation thanks you very much for this opportunity to submit comments 
about market-promotion programs (MPP's) and their effectiveness in 
expanding exports of U.S. agricultural products. The hearing is very 
timely and we appreciate you holding it.
    The USA Rice Federation strongly supports market-promotion programs 
and the highly productive role played by the Foreign Agricultural 
Service (FAS) in implementing them. As an active participant in the 
U.S. Agricultural Export Development Council, an organization to 
promote U.S. agricultural exports, the USA Rice Federation works 
aggressively with other members to advocate authorization of and annual 
funding at farm bill-legislated levels for the Market Access Program 
(MAP) and the Foreign Market Development Program (FMD), the two market-
promotion programs that we use most frequently and have participated in 
for many years.
Exports
    The U.S. rice industry is a key player in the global rice market 
and the economic health of the rice industry is tied to exports. While 
the United States produces only 2 percent of global rice output, the 
United States ranks, in any year, as the third or fourth largest global 
exporter and between 45 and 50 percent of the U.S. rice crop is 
exported.
    The United States exports all types and forms of rice: long grain, 
short grain and medium grain in the form of white-milled rice, brown-
milled rice, parboiled rice, and paddy or rough rice (unprocessed 
harvested rice). Approximately \2/3\ of U.S. exports are milled rice 
and the remaining \1/3\ are rough-rice exports.
    The United States exports rice across the globe, with a major 
presence in North and Central America, Northeast Asia, the European 
Union, Turkey and the Middle East, and Africa.
    In many years, the U.S. rice industry exports a greater portion of 
production than any other major rice exporter and this dependence on 
trade makes the U.S. rice industry particularly vulnerable to trade 
disruptions or barriers. As one of the most protected and sensitive 
commodities traded worldwide, market-access obstacles are widespread 
and discourage increased exports of U.S. rice.
Imports
    On the import side, U.S. tariff protection is minimal, and 15 
percent of domestic consumption is sourced from imports, largely 
fragrant rice from Thailand and basmati rice from India. Vietnam and 
China are also import sources.
Economic Contributions
    U.S. rice production supported 128,000 jobs and more than $34 
billion of economic output nationally in 2009. Those directly involved 
in rice exports contributed $6 billion in output and supported more 
than 14,000 jobs.
    U.S. rice exports support small- to-medium-size enterprises 
(SME's):

   According to the 2007 Census of Agriculture (USDA/NASS), 
        there are 10,431 rice farm operators in the United States (AR--
        4,602; CA--2,518; LA--1,303; MS--621; MO--720; and, TX--667). 
        100% of these farms would qualify as SMEs.

   USA Rice mill membership through the USA Rice Millers' 
        Association and/or USA Rice Council includes 30 mills, 
        representing nearly all U.S. rice milling capacity with mill 
        members in seven states: Arkansas, California, Florida, 
        Louisiana, Mississippi, Missouri, and Texas. At least 75% of 
        the mills qualify as small/medium-size enterprises.

   The USA Rice Millers' Association also has 33 associate 
        members, which include exporters and allied businesses, an 
        estimated \2/3\ of which qualify as small/medium-size 
        enterprises.

   The USA Rice Merchants' Association represents rough-rice 
        merchandisers and seedsmen, as well as associated members. The 
        Association has 28 merchant members and 11 associate members. 
        Of the total membership, 92 percent qualify as small/medium-
        size enterprises.
MAP and FMD
    The Market Access Program and Foreign Market Development Program 
play key roles in helping to promote U.S. rice sales overseas. USA Rice 
Federation industry members spend more than $3 in matching funds for 
each $1 of FAS funds received.
    By participating in and contributing to the MAP-FMD public-private 
partnership, USA Rice Federation members are able to export rice 
successfully in a highly-competitive world-rice market and, at the same 
time, contribute significantly to local, state, and national economies.
    The USA Rice Federation uses MAP and FMD funding in over 25 markets 
to conduct successful export market development initiatives, including 
Mexico, Turkey, Nigeria, and South Korea.
    The USA Rice Federation has used MAP and FMD funds to expand rice 
exports to Mexico, the largest customer for U.S. long-grain rice. Of 
the rice consumed in Mexico, 80% comes from the U.S. U.S. rice sales to 
Mexico have boomed in recent years, reaching $313.4 million in value in 
2010, which is nearly double the total export value in 2005. USA Rice 
export promotions have resulted in per-capita rice consumption doubling 
in Mexico during the past 25 years, to reach 17 pounds per capita.
    In Turkey, the USA Rice Federation used MAP and FMD funds to 
organize seminars for the Turkish rice industry and consumer groups to 
help overcome trade barriers erected by the government (pricing, import 
licensing, minimum import pricing). U.S. rice exports were at record 
levels in 2010 (428,000 MT), a volume increase of 866% when compared to 
2009 and Turkey is now the third-largest market in value and second in 
volume terms for U.S. rice-export sales. The U.S. rice industry sells 
mostly medium-grain rice, but also exports some long-grain rice to 
Turkey.
    World food supply and price conditions led Nigeria to modify its 
import regime in 2009, reducing tariffs on rice from 85% to 10% or 
less. In the previous 25 years little or no U.S. rice was exported to 
the country. The USA Rice Federation conducted successful trade-
servicing and promotion activities by using MAP and FMD funds to re-
establish the Nigerian export market. These initiatives resulted in the 
U.S. exporting to Nigeria 75,500 metric tons of long-grain parboiled 
rice, valued at $39.3 million, in calendar year 2010. MAP and FMD 
funding make possible a further strengthening of Nigeria's consumer 
base for U.S. rice exports and the potential for Nigeria to serve as an 
export gateway for U.S. rice into other African markets.
    In 2001, South Korea began importing U.S. rice under its minimum-
access WTO obligation and channeled the imports into industrial uses 
under strict government control. In 2005, rice imported into South 
Korea began to enter the country's consumer market. In 2008, following 
a FMD-funded USA Rice Federation trade mission to bring South Korean 
buyers to the U.S. to learn about the U.S. rice industry, a South 
Korean retailer developed an online business to purchase U.S.-origin 
rice. Since that time the company's total online sales of U.S. rice has 
expanded from less than 20 percent to 70 percent and there has been a 
60 percent increase in the buyer's sale of U.S. rice being made to 
South Korean consumers. The company is now ranked as the top U.S. rice 
sales outlet through online open markets in South Korea.
Conclusion
    U.S. market promotion programs and the federal-private-sector 
partnership they have established are significant trade and economic 
resources for the nation, its agricultural sector, and, specifically, 
the U.S. rice industry, to compete in world markets. Equally as 
important is the fact that to achieve President Barack Obama's National 
Export Initiative goal of doubling U.S. exports over five years, USA 
Rice believes that the upcoming 2012 Farm Bill should emphatically 
reaffirm Congress' longstanding commitment to market promotion programs 
by providing additional resources for them.
    MAP and FMD are among the few tools specifically allowed without 
restriction under WTO rules to help American agriculture and American 
workers remain competitive in a global marketplace that is 
characterized by subsidized foreign competition. The MAP and FMD 
programs have been tremendously successful and extremely cost-effective 
in maintaining and expanding U.S. agricultural exports, protecting and 
creating American jobs, and strengthening farm income.
    The USA Rice Federation is most appreciative for the opportunity to 
comment on market promotion programs. We look forward to continuing to 
work with the Subcommittee and the House Agriculture Committee on 
behalf of MPP's, in particular MAP and FMD, which are the two we use 
most frequently. If we can assist in any other way regarding market 
promotion programs, please call on us at any time.
                                 ______
                                 
                          Submitted Questions
Response from John Brewer, Administrator, Foreign Agricultural Service, 
        U.S. Department of Agriculture
Questions Submitted by Hon. Timothy V. Johnson, a Representative in 
        Congress from Illinois
    Question 1. Mr. Brewer, in your written statement you highlighted 
the fact that ``participants from all corners of the U.S. agricultural 
community utilize FAS-administered trade programs.'' Earlier this year 
USDA proposed some changes to the MAP and FMD programs which seem to 
place a greater emphasis on funding small and medium-sized entities 
(SME) directly. Given that virtually all of the ultimate recipients or 
beneficiaries are SME's, could you clarify exactly what you hope to 
achieve with the proposed program changes?
    Answer. FAS initiated a discussion on possible adjustments to the 
market development programs in November 2010 with the U.S. Agricultural 
Export Development Council's (USAEDC) 70+ members to seek their input 
on strengthening the effectiveness and ensuring the relevancy of the 
programs.
    USAEDC feedback has informed FAS on program strengths and where 
programs could be strengthened. This feedback will lead to more 
effective program management that ensures the programs are accessible, 
connect with the needs of the international market, and operate in a 
manner that meets regulatory requirements, the needs of the 
stakeholders, and can be accomplished with available FAS resources. The 
possible program adjustments highlight small and medium sized 
enterprises (SMEs), in line with the President's National Export 
Initiative (NEI). NEI, in part, aims to expose U.S. companies to the 
benefits of the export market and resources available to help them take 
advantage of export opportunities, a goal consistent with the 
objectives of the market development programs. FAS briefed both House 
and Senate agriculture committee staff in early December regarding the 
proposals and solicited their input.
    FAS intends to continue these discussions. Any resulting program 
changes would be thoroughly reviewed with stakeholders and 
Congressional staffs, gradually implemented, and have a primary goal of 
sharpening program effectiveness. FAS's goal remains to enhance the 
effectiveness of program operations, promote the diversity of groups 
participating, improve groups' performance through better training, 
promote outreach to SMEs, and ensure administrative efficiencies.

    Question 2. Mr. Brewer, USDA has proposed to provide some direct 
funding to small businesses through the MAP program. As you know, these 
programs are successful in part because of the stringent accountability 
required of cooperators. FAS requires significant accounting and 
reporting by participants. If this proposal were to be implemented, 
could you please describe how you would avoid losing the efficiencies 
and accountability gained through partnering with farmer cooperatives, 
state and regional trading groups, and trade associations?
    Answer. FAS raised with USAEDC membership the concept of direct MAP 
funding to small businesses. After discussion with stakeholders, FAS 
decided that the four State Regional Trade Groups (SRTGs) should 
continue as the primary outreach and program delivery entities to SMEs, 
on FAS's behalf. To that end, FAS awarded additional program funds to 
the SRTGs through the 2011 MAP Global Broad-based Initiatives program 
to strengthen SRTG outreach to find and educate new exporters on doing 
business in the international marketplace. In 2010, the SRTGs helped 
more than 700 U.S. companies through the branded program, and many more 
in their generic activities.

    Question 3. Mr. Brewer, we have heard concern from industry 
participants about these proposed changes to MAP and FMD. Have you 
heard these concerns and made revisions or proposed any new changes to 
the original announcement?
    Answer. FAS initiated discussion on concepts to strengthen the 
market development programs with U.S. Agricultural Export Development 
Council (USAEDC) membership at the November 2010 USAEDC Annual Workshop 
in Baltimore. FAS has heard industry participant's concerns and, 
importantly, remains in an ongoing dialog with our partners and other 
stakeholders on ideas for program improvements.
    At this time, there are no decisions that would warrant adjusting 
program guidelines.

    Question 4. Mr. Brewer, you highlighted the extensive presence that 
FAS has throughout the world. Could you describe in greater detail the 
unique role filled by your Foreign Service officers? What is 
accomplished through in-country interactions, that would not be 
possible just from a desk here in D.C.?
    Answer. Our global network of agricultural attaches and locally 
hired staff identify problems, provide practical solutions, and work to 
advance opportunities for U.S. agriculture and support U.S. foreign 
policy in the countries in which they work. FAS employees overseas 
provide market information gathered from contacts and travel throughout 
the countries in which they operate; represent USDA in market access 
discussions with foreign governments; partner in market promotion 
activities conducted in-country; facilitate capacity-building and food 
assistance programs with appropriate contacts in country and provide 
trade servicing for U.S. exporters by explaining the market and the 
opportunities within. FAS Foreign Service Officers are the face of U.S. 
agriculture overseas, and engage in essential contact-building and 
outreach to promote opportunities, explain U.S. policies and positions, 
and cultivate allies in agricultural fora.
    A critical function that cannot be accomplished from a desk in 
Washington is resolving agricultural shipment problems through 
ministry-to-ministry engagement. For example, French authorities 
detained three containers of Florida citrus fruit at the port of 
LeHavre earlier this year due to the suspected presence of citrus 
canker. When the FAS office in Paris discovered that only one out of 
the three containers included fruit from a grove suspected of actually 
harboring the disease, they presented the evidence to the French 
Ministry of Agriculture. FAS then worked closely with USDA's Animal and 
Plant Health Inspection Service to issue an additional declaration 
needed for the European Union, which stated that the fruit came from 
groves free of citrus canker. With this new and proper documentation 
the French authorities released 90 percent of the citrus from this 
shipment as eligible for import, with a value of $100,000.
    In another instance, the FAS office in Algiers intervened to ensure 
the delivery of two blocked shipments of planting seeds after learning 
that the Algerian Ministry of Agriculture had not responded to the 
company's request for an attestation that the shipment was eligible for 
entry into Algeria. FAS Algiers was able to contact the Ministry, 
quickly resolve the issue and gain release of the delayed shipments of 
vegetable seeds, one a sea freight order for $193,000 and the other an 
air freight order for $44,000. The company was at risk of losing an 
annual contract worth more than $560,000 in trade with Algerian 
clients. In both cases our close contacts with both private and public 
entities facilitated the resolution of the issues.

    Question 5. Mr. Brewer, you mentioned in your testimony that ``FAS 
employees serving in U.S. embassies are our eyes and ears around the 
world, providing the agricultural expertise to identify and seize 
opportunities, by capturing real-time information on emerging trade and 
market development issues, and averting problems before they become 
trade barriers that impede U.S. exports.'' How do FAS employees 
leverage their in-country presence to fulfill these responsibilities?
    Answer. FAS employees work to identify market opportunities by 
providing market intelligence, identifying best market prospects and 
potential barriers to increased market access for agricultural exports. 
In some countries FAS employees provide ground truth when agricultural 
market information is not readily available and/or unreliable. FAS 
staff identify proposed detrimental trade actions. Early identification 
is essential to developing strategies to quickly address and resolve 
threats to trade which range from a blocked shipment to host government 
legislation. FAS overseas offices support U.S. trade objectives by 
proposing activities and selecting candidates for training, technical 
assistance or scientific and academic exchanges that serve to educate 
other countries in new technologies, trade-friendly regulatory systems 
and infrastructure development. Our ability to identify and respond to 
both opportunities and threats is the result of the cultivation of an 
extensive network of contacts, both in the government and the private 
sector in the countries where FAS has an in-country presence.
    In May 2010, FAS' Agricultural Trade Office (ATO) in Beijing led a 
delegation of 35 Chinese buyers to participate in the Food Marketing 
Institute show in Las Vegas, Nevada. The delegation was mixed between 
experienced buyers from Beijing and new buyers from specifically 
targeted emerging city markets such as Qingdao, Zhengzhou, Dalian, 
Harbin and the provinces of Xinjiang and Inner Mongolia. One ATO staff 
person accompanied the group, providing translation and general support 
for the group. ATO's initial estimate of sales generated from this show 
was $15 million for one year. At eight months, confirmed actual sales 
have exceeded $17 million. Of particular note are the sales of alfalfa, 
which were a direct result of the expanded program set up by ATO; and 
sales of fruit into the emerging market city of Qingdao.
    In 2010, U.S. exporter Max InterAmericas/Maruchan Foods met with 
ATO Sao Paulo to introduce themself and solicit market advice for 
introducing their product (noodles) to the Brazilian market. Meetings 
arranged on the same day between Max InterAmericas/Maruchan Foods and 
Spectrus Importacao led to the importer purchasing its first container 
of noodles in October 2010. For 2011, sales are expected to reach $2 
million.

    Question 6. Mr. Brewer, your Foreign Service officers (FSO) are 
known for their expertise in trade and agricultural issues abroad. 
Could you describe the background and training required at USDA which 
makes your FSO's unique and helps them effectively promote U.S. 
exports?
    Answer. To be eligible to apply to be a Foreign Service Officer, 
candidates must have 18 months of USDA service and one year of FAS 
service. Successful candidates undergo intensive on-the-job training, 
including learning about the USDA and FAS mission and objectives, such 
as commodity and trade reporting, trade policy, market development, 
domestic policies, regulatory issues affecting food safety and animal 
and plant health, and supervision and management. Once selected for an 
assignment, FSOs enter into intensive training including language, area 
studies, cultural awareness and other courses related to their 
assignment. Many FSOs have agricultural backgrounds and education, 
including advanced degrees, are former Peace Corps volunteers and have 
other related experiences.

    Question 7. Mr. Brewer, in your testimony you highlighted the value 
of U.S. farm and food products. In your view, how important is it to 
expand exports of branded products through the Market Access Program to 
global consumers who associate those brands with high-quality U.S. 
products?
    Answer. The export successes of small companies and agricultural 
cooperatives achieved through branded activities funded by the Market 
Access Program (MAP) are well documented in the FAS Office of Trade 
Programs' publication ``Export Programs at Work,'' copies of which have 
been shared with Congressional offices. While generic promotion works 
well for broad commodities, such as grains and oilseeds, and products 
for which branding is difficult, such as beef and leather, for the 
processed products sector and some specialty crops, branding is 
fundamental. With nearly 95 percent of the world's consumers living 
outside the borders of the United States, many of whom are young and 
looking for new products to try, MAP provides critical seed money to 
help our small, inexperienced and emerging food processors to better 
understand the opportunities, and challenges, of the export market, and 
to see if and how they can develop such opportunities into actual 
foreign sales.
Questions Submitted by Hon. Collin C. Peterson, a Representative in 
        Congress from Minnesota
    Question 1. What criteria does USDA use to evaluate the 
effectiveness of the five export programs under FAS?
    Answer. Program effectiveness is assessed in a number of ways. Each 
participant submits a Unified Export Strategy (UES), which is an 
activity plan and application for funding for all programs sought, and 
a reporting tool for results from previous program activities for 
returning organizations. The UES process covers all five FAS 
administered export programs. The review process for recommending 
funding, places the most weight on evaluation of past efforts and 
program results. Each recipient of program funding is obligated to 
annually report results against the performance measures established in 
their approved program/project proposals.
    Since 2005, FAS has tracked a variety of program metrics, UES 
performance measure results, industry contributions, and various 
measures related to small company participants, i.e., number of 
companies making their first export sale. FAS, in 2010, commissioned an 
update of a 2007 third party cost-benefit study of market development 
programs. The updated study analyzed the impact of the increase in 
foreign market development investment that took place under the 2002 
Farm Bill through 2009. It concluded that every dollar of increased 
investment in market development activities resulted in $35 in U.S. 
agricultural exports. It also reported that U.S. agricultural exports 
were $6.1 billion higher in 2009, compared to what they would have been 
without the increased investment.

    Question 2. Are their requirements that entities that receive 
Market Access Program (MAP) funding ``graduate'' from the program after 
a certain number of years?
    Answer. Small and medium-sized entities (SMEs) participating in 
MAP-branded programs are limited to 5 years of funding in a single 
country, after which entities graduate from the country.

    Question 2a. If so, how many MAP recipients have actually graduated 
from the program since inception?
    Answer. MAP branded activities have a 5 year graduation period for 
branded activities for a given company in a given market. Since 1994, 
when FAS began keeping detailed SME records, about 8,800 SMEs have 
participated in branded MAP programs and, of those, about eight percent 
overall are documented as having graduated out of a particular market. 
A company may stop using MAP funds in a market before the end of their 
5 year period; may become established and shift to enter a different 
market or may leave the market and program for business reasons. A 
given company may be in more than one market, and each company-market 
situation has its own graduation period. The State Regional Trade 
Groups, that manage the larger portion of the MAP branded effort, have 
tracking systems in place to monitor such activities, by company and 
market, to ensure participating companies graduate out of a given 
market at the end of the respective 5 year period.

    Question 2b. How many are still exporting the product to the region 
for which they were receiving funding?
    Answer. The 5 year period establishes a company's presence in a 
market. FAS does not track a company's sales after it is no longer 
receiving MAP funds.

    Question 2c. If not, what are some reasons why graduation may not 
be possible for some commodities, regions, or organization?
    Answer. In MAP branded programming, FAS partners with program 
participants, such as State Regional Trade Groups (SRTGs), in a 50/50 
cost share effort to assist individual small companies to establish 
their brand in a particular market. For most of the companies 
participating in branded programs, 5 years is appropriate for the 
targeted markets. Participation in some of the major foreign trade 
shows is exempted from the graduation requirement as such events often 
draw buyers from all over the world, in addition to importers from the 
country hosting the show.

    Question 3. How does USDA determine the priority among different 
U.S. commodities for the Foreign Market Development Program (FMDP)? 
What are the primary criteria for deciding funding levels?
    Answer. Foreign Market Development (Cooperator) Program (FMD) 
funding is allocated as broadly as possible to achieve the program's 
purpose to create, expand or maintain foreign markets for U.S. 
agricultural commodities and products. FMD does not set priorities 
among commodities. Close to 25 commodity organizations representing 
broad commodity and product sectors--from wheat and feed grains, to 
dairy, leather and livestock genetics--participate in FMD. Potential 
and existing Cooperators apply for FMD and any of the other four USDA 
market development programs using the Unified Export Strategy (UES). 
This document is an application, an activity plan, and is also a 
reporting tool. The UES is the basis for determining if an organization 
will receive funding. On receipt, the UES is first reviewed for 
sufficiency, i.e., all information necessary has been submitted. The 
UES then undergoes a thorough qualitative review by FAS program, 
technical and field staff to evaluate the applicant's program proposal 
and the merits of the market conditions noted as justification. In that 
review, FAS also assesses the applicant's capabilities to conduct 
strategic planning, implement and manage programs, and, for returning 
groups, the past record of the organization on those factors, along 
with program evaluations and demonstrated results. Demonstrating 
results is the primary criteria. For on-going programs, increased or 
decreased funding is in large part based on past performance, the 
previous year's level of funding, and current year available funds. New 
applicants are reviewed on potential program impact, capabilities and 
resources to implement requested programming. Recommendations then 
undergo a quantitative competition in a formula. The contributions the 
applicant brings to the program are the heaviest weighted factor in the 
final funding level.
Question Submitted by Hon. Vicky Hartzler, a Representative in Congress 
        from Missouri
    Question. Mr. Brewer, in your written statement you spoke to the 
problem we have in emerging markets with counterfeiting of U.S. brands 
and what FAS is doing in coordination with EMP and participants to 
protect U.S. brands and prevent counterfeiting. Could you elaborate, 
for the Committee, about some of the findings from the above, further 
work to preserve intellectual property rights such as trademarked 
brands, and protection of branded products in emerging markets?
    Answer. FAS does accept EMP proposals that address counterfeiting 
of U.S. brands. As an example, for more than a decade, the Ginseng 
Board of Wisconsin (GBW) has battled Chinese counterfeiters selling 
fake Wisconsin Ginseng. With 90 percent of its exports going to China, 
the GBW moved aggressively to regain control of its brand. Using EMP, 
GBW initiated research to develop a technique to detect trace elements 
of ginseng's valuable root to Wisconsin or where it was grown 
originally; initial findings are promising.
    FAS' global network of agricultural attaches also work to identify 
IPR infringement of U.S. products overseas and help protect U.S. 
producers. For example, in response to trademark property threats, FAS 
offices in China provide intellectual property assistance to U.S. 
cooperators, agricultural companies and interests, both newly entering 
and already established in the China market. Additionally, FAS Beijing 
provides on-the-ground investigation of the IPR protection of U.S. food 
and agricultural products. In a 2010 report, prepared by FAS Beijing, 
FAS' attaches identified the most at-risk U.S. products and offered 
recommendations for U.S. exporters to combat IPR infringement and 
minimize its impact. This information has been provided to U.S. 
exporters via public attache reports for use by the agricultural 
exporting trade. Additionally, FAS has provided information to bolster 
the U.S. Embassy's web-based IPR toolkit and maintains an IPR issues 
page on the FAS Embassy website with useful information for U.S. 
exporters on how to protect their rights.

                                  
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